Foxconn’s (OTC:HNHPF) recent earnings indicate a revolutionary shift in the global technology supply chain, one that could resonate across the ETF universe. A company that was once as familiar as Apple Inc’s (NASDAQ:AAPL) iPhone assembler is now bringing in more revenue building AI servers than consumer electronics — a first in the company’s history.
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For its part, AI server sales (cloud and networking unit) comprised 41% of Foxconn’s second-quarter revenues, surpassing consumer electronics’ 35% share. The shift signifies the decline of the so-called “Apple era,” as Foxconn makes a heavy bet on fueling the AI revolution. With Taiwan already making close to 90% of the world’s AI servers as estimated by an industry expert cited by Reuters, the nation, and its listed companies, are now integral pillars of the data center economy.
For ETFs, the shift reconfigures exposure along a number of fronts:
Tech ETFs Could Require A Reweight
Trusts with overweight Apple holdings, like the Invesco QQQ Trust (NASDAQ:QQQ) or the Technology Select Sector SPDR Fund (NYSE:XLK), could see their classic consumer-hardware lean increasingly eclipsed by the capital-spending AI supply chain.
Niche AI & Data Center ETFs Could Benefit
Stocks such as the Roundhill Generative AI & Technology ETF (NYSE:CHAT) may gain from Foxconn’s increasing dominance in AI servers, particularly as generative AI demand drives cloud and data infrastructure higher.
Taiwan-Centric Plays May Draw Flows
The iShares MSCI Taiwan ETF (NYSE:EWT), which already houses such semiconductor leaders as TSMC, could receive new attention as Foxconn and its rivals, Quanta Computer and Wistron Corp, both of which also have a share in the ETF’s holdings, solidify Taiwan’s position at the center of AI server production.
Foxconn is also ramping up global investments. Last week, the company said that it is boosting capital expenditure by more than 20% in 2025 to expand AI server production facilities in the U.S. and Mexico. That could further diversify ETF exposure into infrastructure and supply-chain plays tied to AI buildouts.
Briefly, Apple previously helped determine Foxconn’s fortunes, but now AI is reconfiguring Foxconn, and, incidentally, influencing how ETFs catch the next tech growth wave. Investors might consider looking past flashy consumer devices to the less obvious, but equally potent underpinnings of AI computing.
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