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Foxconn Sets Sights on AI Leadership with New Nvidia Superchip Facility in Mexico

Taiwanese electronics giant Foxconn, the world's largest contract electronics manufacturer, announced that it has significantly outperformed market expectations when it comes to strong growth in quarterly profit and a clear focus on an emerging AI server market.

Due to the growing demand for artificial intelligence (AI) servers, Foxconn's profit grew 14% during Q3, marking the fifth consecutive quarter of growth. It credits the growth in its sales of servers powered by Nvidia's Superchip, which pushed its quarterly revenues 20% above their highest level yet for this time of year.

Foxconn also sees AI servers as a key area for 2024. The firm projected that AI servers will account for an impressive 50% of its overall server revenue next year. To support this push, Foxconn is building what it touts as the world's biggest factory in Mexico to produce Nvidia's GB200 superchip, the mainframe of Nvidia's new Blackwell computing platform.

Foxconn is likely hoping such investments in state-of-the-art infrastructure will solidify its place in the market for AI servers. It is meanwhile breaking down in the electric vehicle (EV) market. Foxconn had originally targeted 5% of global electric-vehicle sales by 2025, but it has delayed that goal now because demand in the space came in softer than expected.

Foxconn is still optimistic about the future and said that the automaker partnerships, including two Japanese companies, are in the pipeline. The company should anticipate an increase in orders of the electric vehicles very soon. The company will, for now, continue to focus on growing other profitable lines in the business.

October promised more positives in the form of Foxconn announcing record-high monthly sales. The Company hopes to see year-over-year revenues in Q4 steady concerning the sale of AI servers. In 2024, the company already expects high sales due to AI servers; however, consumer electronics are anticipated to have relatively soft sales, considering global economic woes.

Despite the stumble of EVs, Foxconn is still quite a firm player in technology innovation. However, an apparent shift toward AI has already seen the share value double up in 2024. "Foxconn is well set to dominate the market while being flexible and open to others," Young Liu said of the CEO in expanding AI investments. This kind of diversified approach, based on AI and cloud solutions, would propel Foxconn's growth in the near term.