[News] Apple’s Exclusive AI Order Boosts Revenue via Foxconn’s FII Vietnam Plant

2023-08-07 Consumer Electronics editor

According to the news reports from money.udn, which indicate that Foxconn, the prominent tech manufacturer, has clinched a substantial contract to supply Apple with AI servers, marking a monumental stride into the Apple AI server market. Notably, these servers will be dispatched from Foxconn’s manufacturing facility in Vietnam, positioning it as a pivotal player in Taiwan’s burgeoning AI sector.

While Foxconn traditionally refrains from commenting on individual clients and order specifics, market insiders reveal that Foxconn is not only the foremost assembler of Apple iPhones but also a crucial supplier of data center servers. As Apple charges ahead in the realm of AI applications, necessitating heightened support from AI servers, Foxconn’s stronghold in the AI server market has positioned it as Apple’s preferred collaborator due to its longstanding partnership.

Insiders indicate that Apple’s directive has prompted Foxconn to exclusively ship AI servers to Apple via its subsidiary, Foxconn Industrial Internet (FII), stationed in Vietnam.

Market research firms report that Foxconn currently holds a substantial global server market share of approximately 43%. This prominence not only establishes Foxconn as a manufacturing leader but also as the primary supplier to Amazon, the global cloud services (CSP) frontrunner. Having already supplied AI servers for ChatGPT and NVIDIA, and with primary customer Google rapidly venturing into generative AI, along with Apple’s recent strategic foray, Foxconn is poised for a surge in server business orders.

Apple’s CEO, Tim Cook, recently confirmed Apple’s longstanding involvement in various AI technologies, including generative AI, while emphasizing the current surge of resources into AI development. With Apple’s R&D expenditure rising to $22.61 billion last quarter, experts speculate that a significant portion has been allocated to AI development.

Moreover, international sources report that Apple is discreetly crafting the “Ajax” large-scale language model, potentially heralding the arrival of the generative chatbot “SiriGPT” in the near future. With Apple’s vast user base across the globe, abundant data resources could pose a threat to rivals such as Google and Microsoft.

Industry pundits assert that Apple’s extensive global user feedback from devices like iPhones, iPads, and Macs, combined with the mature ecosystem of the App Store, endows it with a strategic advantage in AI application development. Swiftly advancing AI server and data center deployment could enable Apple to navigate the curve and surge ahead in this competitive race.

Foxconn’s Chairman previously expressed optimism in the growth potential of CSP and AI servers. With Foxconn’s server revenues reaching $1.1 trillion last year, the company’s status as a server manufacturing leader naturally aligns with this burgeoning demand. Industry estimates underscore the dramatic increase in Foxconn’s AI server-related orders, reaching several billion dollars. This positions Foxconn as the definitive victor in the current AI wave, solidifying its place at the forefront of global AI server leadership.