- Foxconn wants to capture half the global AI server market within two years
- Existing production capacity is fully booked for at least 18 months
- AI infrastructure could generate 65% of Foxconn’s revenue within five years
Foxconn is seeking to increase its share of artificial intelligence server manufacturing as demand for computing infrastructure continues expanding worldwide.
The Taiwanese electronics manufacturer believes it could supply half of the market within the next couple of years.
It currently controls about 40% of the AI server market, and its expansion plans include increasing manufacturing capacity, developing American operations and investing further across the artificial intelligence supply chain.
Latest Videos FromTechRadar
Foxconn to expand its AI infrastructure business
The company expects its market share to reach approximately 45% next year before potentially climbing to 50%.
Chairman Young Liu disclosed the projection during an interview with CNBC‘s Christine Tan, stating, “I think we can grow up to 50 percent.”
Artificial intelligence infrastructure is also expected to become an increasingly important source of revenue for the manufacturer.
Foxconn anticipates that servers, racks and related infrastructure will contribute between 60% and 65% of revenue within three to five years.
That projection excludes edge AI devices, which process artificial intelligence workloads directly on local hardware.
Current orders mainly come from artificial intelligence developers and cloud computing providers, while government agencies and conventional businesses have yet to adopt the technology extensively.
Manufacturing capacity is already fully booked for at least the next 18 months, indicating substantial demand for additional computing equipment.
The company therefore intends to expand its involvement beyond conventional electronics assembly to supply more components and infrastructure required by data centres.
Foxconn to expand in the US
Foxconn also intends to increase its American manufacturing operations by taking on additional activities further upstream in the supply chain.
This would extend its involvement beyond assembling finished equipment towards supplying more of the infrastructure required by American customers.
“What we are going to do is we’re going to move up the supply chain,” Liu said.
Higher operating expenses in the United States mean the company initially intends to concentrate on products offering stronger profit margins.
AI server racks and data centre equipment are among the categories expected to receive attention during this expansion.
Foxconn believes greater manufacturing volumes could eventually reduce production costs, although achieving that outcome would require sustained investment.
Its current annual allocation for artificial intelligence activities stands between $3 billion and $5 billion.
That spending could increase as the manufacturer expands its involvement across different stages of infrastructure production.
However, excessive commitments remain a concern as technology companies continue investing heavily in computing capacity.
Foxconn expects weaker orders from individual customers could be offset by stronger purchases elsewhere in the market.
A simultaneous reduction in spending across the artificial intelligence industry would create greater difficulties for manufacturers throughout the supply chain.
Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.
https://cdn.mos.cms.futurecdn.net/h8PtKoPckFsFwU8xPtXRhk-2560-80.jpg
Source link
Efosa Udinmwen
