Title: Foxconn Predicts Exponential AI Server Growth in H2 2021, Benefitting from ChatGPT and Other Generative AI Systems
Introduction:
Foxconn, known for manufacturing Apple products, is among the latest beneficiaries of the growth in artificial intelligence systems. Foxconn expects at least a double increase in its AI server business in H2 2021 driven by the spread of generative AI systems like ChatGPT and their growing reliance among users. Nvidia has raised its revenue outlook due to increased demand for processors in AI servers, making it the most valuable semiconductor company.
Section 1: Foxconn Predicts Triple Digit Growth in AI Servers in H2 2021
Foxconn’s chairman, Young Liu, announced at the company’s annual meeting that its AI server business is likely to double in H2 2021, driven by generative AI systems like ChatGPT. With the growing reliance on these systems, AI server demand is surging. Liu forecasts triple-digit growth in AI servers in H2 2021, which is expected to boost Foxconn’s server business as it has a 40% global market share.
Section 2: Foxconn Diversifies Beyond Apple
While Foxconn is the largest manufacturing partner for Apple, it produces a wide range of electronic products like industrial robots, computers, semiconductors, and electric cars. Additionally, Foxconn manufacturers servers sold by branded vendors like Dell and groups like Google and Amazon, which use large data centers. With NT$1.1 trillion of its NT$6.6 trillion revenues last year coming from server manufacturing, Foxconn has a 20% server business in AI.
Section 3: Increased Demand for AI Systems by Data Centers
Nvidia raised its revenue outlook due to exponential growth in data center capacity needed to train AI systems. Nvidia forecasts sales of $11 billion in Q3 2021, which is more than 50% above analysts’ expectations. Taiwan Semiconductor Manufacturing (TSM) also predicts structurally higher demand for AI-fueled growth, accelerating the AI revolution. Increased demand implies a growing need for AI processors, which benefits Foxconn as it is the largest manufacturer of notebooks and servers for Nvidia and Dell.
Section 4: Foxconn Compared to Nvidia in AI Server Boom Share of Revenue
Electronic manufacturing service providers like Foxconn are presently receiving a much lower share of revenue from the AI server boom compared to chip designers like Nvidia. SemiAnalysis reveals that assembly and testing account for just $495 of the $10,424 cost of an Intel Sapphire Rapids AI server. Foxconn manufactures other components of AI servers such as motherboards, cooling systems, chassis, and connectors, which are minor parts of AI server’s Bills of Material (BOM).
Section 5: Foxconn’s Overall Outlook
Foxconn’s bullish forecast on the AI server business and its cautious overall outlook contrasts drastically. Liu reiterates that the lack of visibility due to inflation and geopolitical tensions weighing in the global economy might affect Foxconn’s 2023 revenues. As Foxconn focuses on assembling tech gadgets, it receives a smaller share of revenue from AI server increases than chip designers like Nvidia.
Additional Piece:
The growth in AI systems has brought significant progress in many areas, spanning from medicine to business and security. In the business context, AI has improved customer service delivery, data analysis, and decision-making. In healthcare, AI has enabled early detection and diagnosis of critical illnesses, prolonging human life. Nevara Labs, for instance, develops AI systems that help physicians detect cancer and other diseases early. Moreover, AI has inspired creativity, leading to the creation of AI music, art, and literature.
As AI continues to revolutionize various industries, privacy and ethical concerns remain crucial. There is a need for transparency and accountability in the development and use of AI. Unbridled use of AI systems may result in privacy infringements, job losses, and legal concerns, especially if AI is operated without human intelligence’s supervision.
Conclusion:
AI’s exponential growth in several industries is redefining how humans work and interact with machines, and AI’s market continues to gain traction. Demands for AI systems are soaring, with various technologies, such as ChatGPT, driving the race. Foxconn is among the beneficiaries of this growth, with its AI server business set to double in H2 2021, as demand surges for AI processors and systems. However, as AI revolutionizes industries, ethical concerns remain crucial, necessitating the development of accountability processes in AI development and usage to ensure human rights and freedom are respected.
Summary:
Foxconn’s AI server business is set to double in H2 2021, driven by the growing reliance on generative AI systems like ChatGPT by users. Foxconn is presently Apple’s largest manufacturing partner and produces electric cars, industrial robots, computers, and semiconductors. The demand for AI systems is accelerating, and Taiwanese Semiconductor Manufacturing and NVIDIA raised their revenue outlooks due to the exponential growth in data center capacity needed to train AI systems and structurally higher demand, respectively. However, Electronic manufacturing service providers presently receive a much smaller share of revenue than chip designers like NVIDIA from AI server increases. While AI systems open up significant progress in many areas, privacy and ethical concerns remain crucial, necessitating the development of accountability processes in AI development and usage.
—————————————————-
| Article | Link |
|---|---|
| UK Artful Impressions | Premiere Etsy Store |
| Sponsored Content | View |
| 90’s Rock Band Review | View |
| Ted Lasso’s MacBook Guide | View |
| Nature’s Secret to More Energy | View |
| Ancient Recipe for Weight Loss | View |
| MacBook Air i3 vs i5 | View |
| You Need a VPN in 2023 – Liberty Shield | View |
Foxconn expects its AI server business to double at least in the second half of this year, making the world’s largest contract electronics manufacturer — best known for making the iPhone — the latest beneficiary of intelligence systems’ rapid rise artificial generative like ChatGPT.
“We could see triple-digit growth in AI servers in the second half,” Foxconn chairman Young Liu said at the company’s annual meeting on Wednesday. Demand for processors in such servers propelled chip designer Nvidia to become the most valuable semiconductor company, by its market capitalization briefly breaching the $1 trillion mark on Tuesday.
Liu said the rapid spread of generative AI systems like ChatGPT and the growing reliance on them by users is driving the surge in demand.
While Foxconn is best known as Apple’s largest manufacturing partner, the group produces a wide range of other electronic products and components, from computers and industrial robots to electric cars and semiconductors. Along with rivals such as Quanta Computer, it also manufactures much of the servers sold by branded vendors such as Dell, even manufacturing them directly for users of large data centers such as Google and Amazon.
Of Foxconn’s NT$6.6 trillion (US$215 billion) last year, NT$1.1 trillion came from server manufacturing, of which it has a 40% global market share, and 20% of the server business was in artificial intelligence.
Liu’s forecast for this year comes just a week after Nvidia raised its revenue outlook due to exponential growth in data center capacity needed to train AI systems. Nvidia it forecasts sales of $11 billion in the three months to the end of July, more than 50% above analysts’ expectations, an improvement that helped it reach the trillion-dollar valuation this week.
Taiwan Semiconductor Manufacturing, the world’s largest contract chipmaker, also spoke of “structurally higher demand,” in part due to AI-fueled growth.
Foxconn’s bullish forecast contrasted sharply with a very cautious overall outlook. Highlighting the lack of visibility due to inflation and geopolitical tensions weighing on the global economy, Liu reiterated his earlier forecast that 2023 revenues would be flat compared to last year.
As electronics manufacturing service providers like Foxconn focus on assembling tech gadgets and making a range of low-end components, they are receiving a much smaller share of revenue from the AI server boom than chips like Nvidia.
Assembly and testing account for just $495 of the $10,424 cost of an Intel Sapphire Rapids AI server, according to chip research firm SemiAnalysis. Other components manufactured by Foxconn, such as connectors, chassis, cooling systems, and motherboards, are also minor parts of an AI server’s BOM.
“But we have a very large footprint as you know,” said a person close to Foxconn. “So if you add it all up, it’s a big momentum.”
https://www.ft.com/content/52c535ad-1f29-4ac9-9ba4-84065efef442
—————————————————-