The term “AI server” refers to a new type of data centre product that heavily relies on GPUs and other specialised processors to accelerate AI and generative AI-based applications.
Foxconn AI server
Demand for such AI servers is increasing at an exponential rate, and Foxconn appears to be willing to stake its future growth prospects on it.
During his most recent earnings call with investors, Foxconn president Liu Yangwei emphasised the fast growth of the AI server industry in the next years.
According to Yangwei, hardware sales for data centres particularly designed for AI applications will reach $150 billion by 2027, up from “just” $30 billion at the end of this year. Foxconn isn’t your typical device production line, producing iPhones and low-cost cellphones.
The Chinese corporation, based in Taiwan, is the world’s largest technology manufacturer as well as one of the world’s greatest employers.
According to the firm, generative AI services are fueling a growing demand for specialised AI servers, and that demand is expected to rise over time.
A $150 billion AI server market would represent a dramatic shift in the total server market, which IDC estimates would be valued $123 billion in 2022 and $186 billion in 2027. According to Yangwei’s projections, the AI server market will be nearly similar to regular servers in four years.
According to Foxconn’s president, cloud service providers (CSP) are the primary customers driving the increasing demand for AI servers.
Amazon Web Services (AWS), Google, and Microsoft (Azure) have long formed the backbone of the internet infrastructure, and their visibility and relevance are set to grow in the years ahead.
Foxconn’s projections regarding the future of AI server business aren’t simply for show. Yangwei said that the Chinese business presently controls more than 70% of the market for front-end GPU modules and boards.
Foxconn may also rely on its own US-based production facilities and long-standing agreements with the aforementioned US-based cloud providers.
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