TAIPEI (Taiwan News) — Foxconn handset arm FIH Mobile posted NT$30.91 billion (US$1.02 billion) in revenue on Wednesday, up 1.9% from the same period last year.

The company attributed its improved performance to a strategic shift away from traditional phone solutions toward higher-margin segments, helping raise its gross margin from 1.61% to 3.17%, per CNA.

FIH said it expects stronger first-half results compared to last year, supported by rising demand in smart manufacturing. While full-year sales may dip slightly, ongoing adjustments in product and customer mix should support margins.

Despite the gains, the company warned that a weakening US dollar could pressure non-operating income. Foreign exchange earnings fell to US$2.9 million in Q1 from US$7.9 million a year ago. The company also cited renewed concerns over tariff risks tied to US trade policy.

To diversify supply chains, FIH said it will step up operations in Mexico and rebuild its North American business. Its plant in Chihuahua will begin offering electronic manufacturing services for the medical sector, creating an alternative to Asian-based production.