Foxconn sees significant shortage of AI chips affecting server business

Foxconn sees significant shortage of AI chips affecting server business

The chairman of Hon Hai, known in the West as Foxconn, is concerned about the lack of AI-ready chips for the server market. This is reported by NetworkWorld.

Speaking at the company’s annual New Year’s dinner, Chairman Yung Liu said he expects AI chip shortages to persist in 2024, with recovery dependent on new factory openings and a stable geopolitical situation.

The official also said he expects Hon Hai’s performance to grow slightly year-over-year, held back by a shortage of chips. Previously, the company gave conservative and neutral expectations for 2024.

Although Hon Hai is best known as Apple’s contract manufacturer for the iPhone, the firm makes PCs, components and servers for a variety of companies.

In total, according to Digitimes Research, it occupies approximately 43% of the global server market.

Liu said last year that AI server sales are expected to reach $150 billion by 2027. This is larger than the projected size of the entire server market in 2025.

In the earnings call, Hon Hai executives noted that they expect the Cloud and Networking Products division to be one of the main growth drivers in 2024 due to strong demand for AI servers.

In Taiwan on Monday, the company reported strong revenue growth from its cloud and networking products. At the same time, a decline in revenues from computing products was noted due to a slowdown in demand for PCs.

ProIT previously reported that NVIDIA would release a slower version of the gaming chip in China to comply with US export controls.

We also reported that Intel’s Meteor Lake processor suddenly became more than 10% faster after a BIOS update.

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