Foxconn, the Taiwanese contract manufacturing giant renowned for assembling Apple’s iPhone, is poised to commence production of AI servers at its facilities in India.
This strategic expansion signifies Foxconn’s diversification beyond smartphones, utilizing its existing infrastructure in Tamil Nadu to manufacture high-performance computing engines crucial for training and deploying artificial intelligence models.
Foxconn’s move into AI server manufacturing aligns with its capability to produce a wide range of products, including servers for global tech giants like Amazon, Google, Microsoft, and NVIDIA. The company aims to increase its share in the global AI server market from 30% to 40% this year, as highlighted by Foxconn chairman Young Liu during the annual shareholders’ meeting in Taipei.
Industry analysts view this shift positively, considering AI servers and electric vehicle components as growth areas offering higher margins compared to mobile phone assembly. Foxconn’s decision is bolstered by India’s production-linked incentive (PLI) scheme for IT hardware, which supports its expansion plans in the country.
In addition to AI servers, Foxconn recently announced plans to locally manufacture Pixel smartphones for Google in Tamil Nadu. The company has also committed significant investments, including a new factory and a joint venture with HCL Group to establish a chip packaging and testing facility in India.
Despite these ambitious plans, Foxconn faces scrutiny over alleged discriminatory hiring practices at its Tamil Nadu facilities, prompting government inquiries. Nevertheless, Foxconn’s pivot towards AI servers underscores its strategic intent to reduce reliance on smartphone manufacturing and capitalize on burgeoning sectors like AI and EVs.
With robust earnings driven by AI technology and a proactive approach to expanding its footprint in India, Foxconn is positioning itself as a pivotal player in global technology manufacturing, poised for sustained growth in the coming years.