Apple Supplier Foxconn Rides the AI Wave, Doubles Down on Server Business Amid ChatGPT Frenzy

Hon Hai Precision Industry Co Ltd HNHPF, operating as Foxconn, forecasts its AI server business to at least double in the second half of this year, taking a cue from Nvidia Corp NVDA.
The critical Apple Inc AAPL supplier expected up to triple-digit growth in AI servers in the second half, Financial Times cites chair Young Liu.
Liu said the ChatGPT frenzy and increasing reliance were driving the boost in demand.
Foxconn also makes many other electronic products and components, from computers and industrial robots to electric cars and semiconductors.
Liu’s forecast for this year comes just a week after Nvidia boosted its revenue outlook due to the exponential growth in data center capacity needed to train AI systems.
Taiwan Semiconductor Manufacturing Company Ltd TSM has also discussed “structurally higher demand” partly due to AI-fuelled growth.
Liu reiterated his earlier forecast that 2023 revenues would be flat compared with last year due to inflation and geopolitical tensions.
Of Foxconn’s NT$6.6 trillion ($215 billion) in revenue last year, NT$1.1 trillion came from manufacturing servers, which has a 40% global market share, and 20% of the server business was in AI.
Foxconn focused on assembling tech gadgets and making a range of lower-end components, therefore receiving a much smaller piece of the revenues from the AI server boom than chip design companies such as Nvidia.
However, Foxconn sources acknowledged an extensive footprint leading to much momentum.
Price Action: HNHPF shares closed higher by 0.41% at $6.61 on Tuesday.
Photo via Wikimedia Commons

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