The contribution from the server business to its revenue is set to grow further in the current quarter, as Foxconn expects a slight decline in smart consumer electronics revenue, as some experts expect slowing iPhone sales after sales surged in the June quarter ahead of the expected imposition of U.S. tariffs.

Hon Hai Technology Group, better known as Foxconn, is reporting that its second-quarter profits climbed due to its AI server sales, which are now making up the largest portion of revenue for the electronics giant, surpassing smartphones as its top revenue source.

Taiwan's Foxconn, the world's largest contract electronics maker, reported Thursday that its second-quarter operating profit rose 27% year over year, as it leans into its artificial intelligence server business.