Foxconn Industrial Internet Co., LTD. (hereinafter referred to as “Industrial Fulian”) released its annual report for 2023 yesterday. In 2023, the company achieved 476.34 billion yuan of operating income, down 6.94% year-on-year; Net profit attributable to shareholders of listed companies was 21.04 billion yuan, up 4.82% year-on-year. Net profit after deducting non-recurring gains and losses was 20.209 billion yuan, up 9.77% year-on-year.

CI522AK04 In 2023, the operating cash flow of Industrial Fulian continued to grow, with a net amount of 43.084 billion yuan, an increase of 180.39%; Assets are in good shape, with net assets and total assets growing to $140.187 billion and $287.705 billion respectively.

Fulian is the world’s leading high-end intelligent manufacturing and industrial Internet solution provider, the main business includes cloud computing, communication network and mobile network equipment, industrial Internet.

In 2023, with the rapid surge of upstream computing power CI522AK04 construction and the rapid growth of downstream AI demand, the revenue of industrial Fulian cloud computing business reached 194.308 billion yuan. Among them, the proportion of cloud service provider products has increased rapidly, accounting for nearly 50% in 2023. AI servers accounted for about 30% of cloud computing revenue, showing a strong growth momentum.

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During the reporting period, the gross margin of Industrial Fulian cloud computing reached 5.08%, an increase of 1.12 percentage points over last year, which is the first time that the annual gross margin level of the sector has exceeded 5% since the company was listed in 2018, mainly due to the substantial increase in the market share of AI servers, effectively driving the overall gross margin of the company’s cloud computing. In the future, the company will take AI technology as the core driving force, fully focus on AI product layout, advanced heat dissipation and liquid cooling technology, deepen joint research and development with global customers and ecological partners, and jointly create a better future.

In 2023, thanks to the upgrade of data center networks of operators and cloud service providers, the company’s communication and mobile network equipment revenue reached 278.976 billion yuan. The operating revenue of high-speed switches and routers showed double-digit growth over the same period last year, and the operating revenue of terminal precision structural parts showed a countertrend growth. During the reporting period, the gross margin of communications CI522AK04 and mobile network equipment was 9.80%, an increase of 0.55 percentage points year-on-year.

In terms of high-speed switches and routers, operating income is heating up quarter by quarter, and the trend of data center AI and network upgrade is driving the growth of high-speed switch shipments. While the company’s share of global head customers is growing, it continues to expand new customers, and its main customers currently cover the world, with a market share of more than 75%. During the reporting period, the mass production and delivery of 100G, 200G, 400G and other high-speed switches were achieved, among which the shipment of 200G and 400G switches significantly increased, and 800G switches have also entered the NPI stage, which is expected to contribute to the operating income in 2024. At the same time, thanks to backbone network upgrades from operators and cloud service providers, the company’s router business showed double-digit growth over the same period last year.

In 2023, the revenue of industrial Internet business of Industrial Fulian reached 1.646 billion yuan. As the world’s leading intelligent manufacturing and industrial Internet overall solution provider, the company added three world-class lighthouse factories during the reporting period, and helped build nine lighthouse factories in total.