Taiwan's Foxconn ,the world's largest contract electronics maker, said on Friday that solid demand from its tech clients would drive strong revenue growth in the first quarter.

The upbeat forecast contrasts with a cautious note struck by many other businesses, rattled by U.S. President Donald Trump's tumultuous trade policy, and underscores that booming demand for artificial intelligence is not over yet and would further drive hardware sales.

"We have not seen CSP (cloud service providers) demand slowing down. There are (market) rumours that CSP demand will peak this year, and then it will go down next year. But we are not seeing that ... at least for Foxconn," Chairman Young Liu told analysts on a conference call.

He said AI servers would account for more than half of the company's total server revenue this year, as it expands production for Nvidia.

Foxconn, whose businesses also include manufacturing iPhones for Apple, booked an October-December net profit of T$46.33 billion ($1.41 billion), missing the T$54.4 billion average of 15 analyst estimates compiled by LSEG.

The profit decline was Foxconn's first since the second quarter of 2023, when it fell 0.9%, and largely stemmed from a loss in its non-operating business segments. Foxconn did not provide a breakdown of its non-operating income and expense account.

In January, Foxconn said October-December revenue jumped 15.2% to a record for that quarter on strong AI server sales.

The company, formally Hon Hai Precision Industry, on Friday said first-quarter revenue from consumer electronics is likely to grow significantly and that sales from cloud and networking products would grow strongly, without giving numerical guidance.

An escalating global trade war has complicated prospects as Foxconn has a major manufacturing presence in China and Mexico, two of the biggest U.S. trading partners facing increased import tariffs under Trump's administration.

Most of the iPhones it makes for Apple are assembled in China.

Foxconn is also building a large manufacturing facility in Mexico to produce AI servers for Nvidia.

Apple said last month it will work with Foxconn to build a 250,000 square foot (23,200 square metre) facility in Houston to assemble servers for data centres that power Apple Intelligence.

Liu said it will plan production cooperation with its customers in several U.S. states.

"It is difficult to predict the U.S. government's attitude and approach towards tariffs. We can only wait and see and do our best with what we can control," he said.

($1 = 32.9550 Taiwan dollars)

(Reporting by Wen-Yee Lee, Yimou Lee and Faith Hung; Writing by Miyoung Kim; Editing by Kim Coghill and Christopher Cushing)