{"id":78829,"date":"2025-08-18T13:53:06","date_gmt":"2025-08-18T13:53:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/78829\/"},"modified":"2025-08-18T13:53:06","modified_gmt":"2025-08-18T13:53:06","slug":"foxconn-moves-beyond-apple-as-ai-servers-drive-growth-in-taiwan-tech-sector","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/78829\/","title":{"rendered":"Foxconn moves beyond Apple as AI servers drive growth in Taiwan tech sector"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Foxconn says it is now one of the world\u2019s largest suppliers of both general-purpose and AI servers, with a market share of nearly 40% in each.Tyrone Siu\/Reuters<\/p>\n

Taiwan\u2019s Foxconn<\/a>, which rose to become a global tech manufacturing juggernaut by assembling millions of iPhones, can now say its main business is no longer Apple AAPL-Q<\/a> as it takes advantage of the AI-boom to diversify its income. Its revenue from making AI servers and other cloud and networking products, including for major customer Nvidia , surpassed smart consumer products such as iPhones for the first time in the second quarter, marking the culmination of a shift that began years ago and has swept through Taiwan\u2019s tech industry.<\/p>\n

Foxconn\u2019s heavy reliance on the smartphone business has long been viewed by investors as a significant risk, as demand growth for new iPhones has gradually weakened since they were first introduced nearly two decades ago, leaving the top iPhone assembler grappling with slowing sales momentum, analysts said.<\/p>\n

Wary of the risk, Foxconn Chairman Young Liu has been championing new businesses such as AI<\/a> servers, electric vehicles<\/a> and semiconductors since taking the top job in 2019.<\/p>\n

While its expansion into EVs and chips has yet to show a meaningful contribution to its topline, Foxconn\u2019s success in AI server manufacturing – the company is Nvidia\u2019s NVDA-Q<\/a> biggest server maker – is the result of its early bets before the technology was thrust into the limelight with the advent of ChatGPT in late 2022.<\/p>\n

Consumer electronics accounted for 35 per cent of Foxconn\u2019s total revenue in the second quarter, while cloud and networking business represented 41 per cent. In 2021, consumer electronics represented 54 per cent of its revenue.<\/p>\n

The firm\u2019s prudent wagers years back helped it cultivate a now-prized relationship with the U.S. AI chip firm and other major AI players, analysts said.<\/p>\n

\u201cThe company has been in the business for years, meeting higher quality requirements, diversifying assembly and operations across sites, and pursuing vertical integration,\u201d said Ming-Chi Kuo, an analyst at TF International Securities.<\/p>\n

Opinion: Investors beware: The AI revolution could be a dud<\/a><\/p>\n

Foxconn began producing reference designs for Nvidia\u2019s graphics cards around 2002 and started making general-purpose servers for cloud service providers\u2019 data centers as early as around 2009. Its AI server business with Nvidia is in many ways the culmination of that history, analysts said.<\/p>\n

Foxconn says it is now one of the world\u2019s largest suppliers of both general-purpose and AI servers, with a market share of nearly 40 per cent in each.<\/p>\n

The company has also shown a willingness to commit investment to a project at an earlier stage than other companies, Kuo said, citing its past investments for Apple and similar moves for Nvidia. \u201cIn long-term partnerships, Foxconn is more willing to take the initiative,\u201d he said.<\/p>\n

Foxconn\u2019s plan to build factories in Houston, Texas \u2013 part of Nvidia\u2019s $500-billion U.S. investment plan \u2013 and in Mexico to produce AI servers for the U.S. client underscores this strategy, analysts said.<\/p>\n

Foxconn now expects its AI server revenue would grow more than 170 per cent in the third quarter year-on-year.<\/p>\n

Foxconn and Nvidia declined to comment. Apple did not respond to request for comment.<\/p>\n

The shift at Foxconn mirrors a broader trend in Taiwan\u2019s technology sector, where companies once centered on consumer electronics \u2013 such as Foxconn with iPhones, and Quanta Computer and Wistron Corp with notebooks \u2013 are now investing heavily in AI servers.<\/p>\n

Nvidia partner Wistron\u2019s revenue for January to July rose 92.7 per cent, while Quanta\u2019s grew 65.6 per cent in the same period.<\/p>\n

Cohere raises US$500-million, hires former Meta AI expert Joelle Pineau<\/a><\/p>\n

\u201cThe monthly sales jump for Taiwan ODMs in the first half of 2025 is evidence of this trend,\u201d said Robert Cheng, head of Asia technology hardware research at BofA Global Research, referring to original design manufacturers like Foxconn that contract manufacture products for their clients.<\/p>\n

Their fast transition into AI servers is also the result of Taiwanese tech supply chain working closely with U.S. tech giants on data center infrastructure work for a decade now, according to Chris Wei, industry consultant at Taiwan\u2019s Market Intelligence & Consulting Institute.<\/p>\n

He estimates Taiwan accounts for about 80 per cent of global server shipments and more than 90 per cent of AI servers.<\/p>\n

Cheng agrees.<\/p>\n

\u201cWe think this shift toward AI servers, whatever form it takes, is good for Taiwan\u2019s tech industry,\u201d he said, noting Taiwanese firms\u2019 ability to rapidly shift to cater to changing needs from their customers.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Foxconn says it is now one of the world\u2019s largest suppliers of both…\n","protected":false},"author":2,"featured_media":78830,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,901,276,277,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-78829","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alberta","tag-artificial-intelligence","tag-artificialintelligence","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/78829","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=78829"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/78829\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/78830"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=78829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=78829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=78829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}