Foxconn: Aiming for Half of Global AI Server Market

Hon Hai Precision Industry, better known as Foxconn, is targeting a 50% share of the global AI server market within the next two years. Chairman Young Liu made the projection during an interview with CNBC, noting that the company’s current share stands at approximately 40%.

Liu expects the company’s market position to rise to around 45% next year before reaching the 50% milestone. The Taiwan-based electronics giant has traditionally assembled Apple iPhones but is now prioritizing AI infrastructure as its primary growth engine. Liu projects that AI infrastructure will generate 60% to 65% of Foxconn’s revenue within three to five years, excluding edge AI devices that process data on local hardware.

The company’s production lines are fully booked for at least the next 18 months. Liu attributed this backlog to sustained demand from AI model developers and cloud service providers. While governments and enterprises have not yet fully adopted the technology, current AI demand remains quite strong.

Foxconn is expanding its manufacturing footprint in the United States to move further up the supply chain. Liu stated that this shift allows the company to respond more quickly to rising U.S. demand. Higher manufacturing costs in the U.S. mean the company will initially focus on products with stronger margins, such as AI server racks and data center equipment.

Greater production scale in the U.S. could eventually lower manufacturing costs. The expansion supports Foxconn’s goal to strengthen its position across the entire AI infrastructure supply chain, including servers, racks, and full data center computing services.

Foxconn plans to spend between $3 billion and $5 billion annually on AI initiatives. Liu indicated that actual spending could exceed this range depending on how far the company integrates its vertical operations. He emphasized the need to manage investments carefully to avoid overexpansion.

Liu warned that overinvestment can kill a company. Foxconn will maintain a tight rein on spending as it grows its AI business. If major customers cut back on spending, Liu said weaker demand from one client could be offset by growth elsewhere, though an industry-wide slowdown would pose a larger challenge.