Foxconn Produces Over Half of Nvidia AI Hardware: Report

Foxconn is producing over half of Nvidia-based AI hardware and is benefiting from the brand's dominance in the artificial intelligence field, according to Economic Daily, citing sources in the supply chain (via TrendForce). Liu Yangwei, the chairman of Foxconn, recently told analysts and investors that the company produces 70% of AI servers sold globally today, reports Commercial Times.

Foxconn appears to be the exclusive maker of Nvidia's compute GPU modules, such as the A100, A800, H100, and H800. These modules are widely used by all makers of AI GPU-based servers — including Nvidia. The latter offers its customers DGX servers based on A100 and H100 as well as HGX boards powered by the same compute GPUs. And as it turns out, over 50% of HGX boards are also produced by Foxconn. 

But Foxcon's involvement in AI hardware does not end with modules and boards — it also spans to servers and server cabinets, establishing a comprehensive vertical integration that encompasses the whole AI landscape.

Yangwei bragged that the company produces 70% of AI servers, which includes not only Nvidia-based products, but also servers that rely on proprietary AI processors by Amazon Web Services and Google, two large cloud service providers (CSPs). This makes Foxconn one of the largest beneficiaries of the explosive growth of AI servers. (Other beneficiaries include Inventec, Quanta, and Supermicro.)

AI servers is a huge market. Yangwei said that it is projected to expand from $30 billion in 2023 to $150 billion by 2027. To provide perspective on this growth, the entire server market was valued at $123 billion in 2022, and is expected to reach $186 billion by 2027, based on data from IDC.

The head of Foxconn claims that CSPs are the largest consumers of AI servers these days, as they strive to offer their clients appropriate platforms to run various artificial intelligence applications.

He also highlighted that the company's enduring partnerships with North American CSPs, coupled with its production capabilities in the U.S. — notably the Wisconsin factory — enable it to provide tailored services to major clients like AWS, Google, and Microsoft, granting Foxconn a unique edge in the competitive market.