Foxconn expects huge AI server biz growth
Published on: Thursday, June 01, 2023
By: AFP
Liu said Foxconn ranks first in global market share for mobile phones, personal computers and servers, with the AI server market now “rising faster than everyone has expected”.
TAIPEI: Taiwanese tech giant and key Apple supplier Foxconn predicts three-digit growth for its artificial intelligence server business due to robust demand for AI products such as ChatGPT, its chairman said Wednesday.Foxconn—known officially as Hon Hai Precision Industry—is the world’s biggest contract electronics manufacturer and assembles devices for many international brands, most notably Apple’s iPhone products.
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It has also moved to diversify beyond electronics assembly, expanding into areas ranging from electric vehicles to semiconductors and servers.
“In 2022 alone, Hon Hai’s revenue for servers reached 1.1 trillion Taiwan dollars ($36 billion) to obtain a 40 percent global market share,” Chairman Young Liu told an annual shareholders’ meeting in Taipei.
Liu said Foxconn ranks first in global market share for mobile phones, personal computers and servers, with the AI server market now “rising faster than everyone has expected”.
He attributed the jump in demand to ChatGPT, the AI programme that burst into the spotlight late last year with the ability to generate essays, poems and conversations from the briefest of prompts.
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Its runaway success has sparked a gold rush with billions of dollars of investment in the field.
“For the second half of this year, we may have a three-digit growth, not two digits... We will continue to boost our market share for servers,” Liu said.
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He said the company’s latest AI servers also use Nvidia chips.
Nvidia is known for creating graphics chips long coveted by gamers but which have become engines for the kind of complex processes involved in artificial intelligence, known as accelerated computing.
Chip company Nvidia exceeded $1 trillion in market value Tuesday as Wall Street stocks mostly rose, following an agreement between President Joe Biden and Republican House Speaker Kevin McCarthy to avoid a US debt default.
All three major indices were in positive territory, while Nvidia jumped more than seven percent on bullish sentiment over its role in artificial intelligence breakthrough technology.
About 20 minutes into trading, the Dow Jones Industrial Average was down 0.2 percent at 33,021.07.
The broad-based S&P 500 climbed 0.4 percent to 4,223.64, while the tech-rich Nasdaq Composite Index gained 1.1 percent to 13,116.93.
The weekend deal, reached after weeks of frantic negotiations, faces opposition from the progressive and hard-right wings of Biden and McCarthy’s respective parties.
The basic framework of the deal lifts the debt ceiling, currently at $31.4 trillion, for two years—enough to get past the next presidential election in 2024.
In return, Republicans secured some limits on federal spending over the same period.
Biden and McCarthy both say they believe the bill will pass the House and then move swiftly to the Senate.
Meanwhile, most large tech companies advanced early Tuesday, with shares of Facebook parent Meta and Apple both up more than one percent while Netflix rose nearly four percent.
The surge in Nvidia shares comes amid rising confidence in new generative AI breakthroughs, capable of delivering the computing heft needed to churn out complex content in just seconds from data centers around the world.
In topping $1 trillion in valuation, Nvidia joins a group of just five other companies, all US tech giants except Saudi Aramco.
Despite the rosy future for AI, Foxconn maintains a “flat” outlook for the 2023 full year, Liu said, after its first quarter profits plunged 56 percent on weakened demand due to a global downturn.
“The global tightening monetary (policies), coupled with tense geopolitics and the significant uncertainty of inflation have a relatively large impact on the economic outlook,” he said.
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