Reuters reported that server orders are starting to drive Taiwan’s tech sector in the same way phones did a decade ago. Suppliers are retooling around AI hardware demand, and Foxconn is positioning itself as the assembly line for data center gear.
It makes sense-smartphone sales are flat, while GPU racks and inference boxes are where the money is. What’s surprising is how fast the pivot is happening.
Feels like in a few years Taiwan might be known less for iPhones and more for being the backbone of AI infrastructure.
rickdeckard•5mo ago
Foxconn is quite in the spotlight for producing iPhones, but it's far from their only area of operation.
54% of their business is Consumer Electronics, and only half of that is estimated to be for Apple, with roughly 20% of their revenue being Apple products.
They have been producing cloud infrastructure and servers for more than a decade, and in the past quarters the revenue of that segment is growing while Smartphone production is rather stable. So somehow this is getting mixed into some general Taiwan tech-sector growth.
The reason why AI drives the Taiwan's tech sector is much less the production of servers, but more that Taiwan is the center of the semiconductor industry producing most of the chips for AI. With TSMC, the biggest semiconductor manufacturer in the world producing chips for Apple, nVidia, Qualcomm and many others, and companies like MediaTek (a huge fabless chip-manufacturer, basically No2 after Qualcomm), I would expect much more momentum in AI caused by those companies than server manufacturers.
Tl;DR: Foxconn is just one of many server-manufacturers (HP, Compal, Inventec, Flextronics, Wistron, Quanta, USI,...), but TSMC is THE chip-manufacturer for the AI-industry...
> Feels like in a few years Taiwan might be known less for iPhones and more for being the backbone of AI infrastructure
Just to note that Taiwan isn't actually producing any iPhones, the facilities are in Mainland China and India.