[News] Foxconn to Boost 2026 Capex by 30%; CPO Switches Reportedly Set for Q3 Mass Production
Foxconn, a key server supplier to NVIDIA and major assembler for Apple, reported a strong first quarter, posting net profit of NT$49.919 billion and record sales of NT$2.12 trillion, with EPS rising 17% year on year to NT$3.56 and gross margin improving to 6.18%, according to its press release.
Citing rotating CEO Michael Chiang, Central News Agency reports that capital expenditure is expected to rise more than 30% in 2026, driven by continued expansion of regional manufacturing, higher automation, and upgrades to core production capacity. According to Foxconn, its capital spending rose about 27% in 2025 to NT$174 billion and is set to grow further this year.
Notably, the company is also gaining traction in silicon photonics, with shipments of 800G+ switches posting strong momentum, Central News Agency reports. Meanwhile, Foxconn’s silicon photonics CPO switches are scheduled to enter mass production in the third quarter, with full-year shipments forecast to reach 10,000 units, the report adds.
According to the report, Foxconn expects strong growth in its AI server business this year, with AI rack shipments projected to rise by a high double-digit percentage in the second quarter and more than double for the full year.
Citing rotating CEO Michael Chiang, Central News Agency notes that Foxconn’s AI rack shipments continue to ramp quarterly, with AI servers already accounting for more than 50% of total server revenue in the first quarter. He added that the firm’s general-purpose server business is also expected to grow in the double digits this year, outperforming industry averages.
On the other hand, Foxconn’s AI solution shipments will continue to increase quarter by quarter, with ASIC-based server projects expected to double in 2026, Central News Agency reports. Liberty Times, citing Foxconn, reports that currently, most ASIC AI servers adopt a “consignment” business model, which helps reduce inventory and working capital requirements while enhancing capital efficiency.
Looking ahead to the second quarter, Chiang noted that although Q2 is traditionally a seasonal low for the ICT industry, strong AI-driven demand is expected to drive a significant sequential increase in revenue, with year-on-year growth also remaining robust, as per Central News Agency.
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(Photo credit: Foxconn)
