Apple Supplier Foxconn Says AI Applications Will Drive Demand for Its Server Business

Foxconn Chairman Liu Young-way said he expects a three-digit increase in its AI server business in the second half of 2023.

By Reuters | Updated: 31 May 2023 14:35 IST

Apple Supplier Foxconn Says AI Applications Will Drive Demand for Its Server Business

Photo Credit: Facebook/ Foxconn

Foxconn this month posted a 56 percent plunge in first-quarter net profit

Highlights

Foxconn has been diversifying production away from China
Foxconn has acquired the former General Motor plant in Lordstown, Ohio
Foxconn assembles around 70 percent of iPhone models

Apple supplier Foxconn said on Wednesday that artificial intelligence applications would strongly drive demand for its server business this year but reiterated 2023 overall would be a flat one for the company on global economic woes.

Foxconn Chairman Liu Young-way told the company's annual shareholders meeting the firm remained cautious about this year due to monetary policy tightening, geopolitical tensions and uncertainty over inflation, but servers were a bright spot due to surging interest in AI.

"More and more people are using ChatGPT," he said. "You can see the market for AI servers will rise much faster than expected. We expect that in the second half of this year there may be a three digit increase."

Samsung Wins Patent for a Tri-Fold Smartphone With Specialised Barrier Layer for Improved Durability

The Taiwanese company has a 40 percent global market share for servers and aims to further increase that, Liu added.

In the first quarter, Foxconn's cloud and network products segment, which includes servers, accounted for 22 percent of revenue, second only to smart consumer electronics —which includes smartphones — at 56 percent

Foxconn this month posted a 56 percent plunge in first-quarter net profit, lagging forecasts in its biggest quarterly fall in three years, and said visibility for the full year was "limited".

iPhone 15 Series to Get Faster Wireless Charging Without MagSafe: Report

The company, the world's largest contract electronics maker, wants to replicate the success it has had with Apple's iPhone with electric vehicles (EV).

Foxconn, formally called Hon Hai Precision Industry, has acquired the former General Motor plant in Lordstown, Ohio, and has also hired a former Nissan executive, Jun Seki, to lead expansion efforts in EVs, where it hopes to become a major manufacturer.

The company is considering expanding its EV battery supply chain beyond Taiwan, possibly into the United States, Indonesia and India, Liu said.

Foxconn, which assembles around 70 percent of iPhones, has been diversifying production away from China, whose strict COVID-19 restrictions disrupted its biggest iPhone plant last year. The company is also seeking to avoid a potential hit to its business from mounting trade tensions between Beijing and Washington.

Liu said China, including its massive iPhone plant in China's Zhengzhou, remained very important for Foxconn.

"The culture there is very similar, our rules and regulations are a bit different, but there is no problem when it comes to talent. So it's relatively easier for us to start new undertakings there. We'll work hard to keep developing there."

Apple launched the iPad Pro (2022) and the iPad (2022) alongside the new Apple TV this week. We discuss the company's latest products, along with our review of the iPhone 14 Pro on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.