Foxconn wants to own 50% of the global AI server market within a few years

Taiwanese home appliance major Hon Hai Technology GroupWith demand for AI infrastructure showing little sign of slowing, Foxconn is looking to expand its market share for artificial intelligence servers and strengthen its manufacturing operations in the United States, Chairman Young Liu told CNBC.

In an interview with CNBC’s Christine Tan, Liu said Foxconn’s share of the global AI server market could reach 50% within a few years and rise to about 45% next year.

“I think we can grow up to 50%,” Liu said, referring to Foxconn’s share of the global AI server market, which currently stands at about 40%.

The company, officially known as Hon Hai Precision Industry, is best known as the primary assembler of Apple’s iPhones, but has increasingly focused on AI infrastructure as a key growth driver.

Liu expects AI infrastructure to account for 60-65% of Foxconn’s revenue over the next three to five years, excluding edge AI devices that run AI and machine learning algorithms directly on local hardware.

Foxconn’s production capacity is already full for at least the next 18 months, Liu said, pointing to continued demand for AI infrastructure.

He said that so far demand has mainly come from AI model developers and cloud service providers, but governments and businesses have not yet fully embraced the technology. Demand for AI remains “very strong,” he added.

Foxconn is looking to expand its manufacturing footprint in the U.S., and Liu said the company plans to move further up the supply chain to better serve the U.S. market.

“What we’re trying to do is move up the supply chain,” he said, explaining that expanding its manufacturing footprint will allow Foxconn to respond more quickly to increased demand.

However, due to high manufacturing costs in the U.S., the company will initially focus on high-margin products such as AI server racks and data center equipment.

Liu said scaling up production in the U.S. could ultimately lead to lower manufacturing costs.

The expansion comes as Foxconn seeks to strengthen its position across the AI ​​infrastructure supply chain, from servers and racks to entire data centers and computing services.

However, even as the demand for AI continues to grow, Liu emphasized the importance of managing investments carefully.

“Over-investment will destroy the company,” he said, adding that Foxconn will continue to tightly rein in spending as it expands its AI business.

Liu said Foxconn could spend $3 billion to $5 billion a year more on AI than planned, depending on how far it expands its vertical integration.

Asked how the company would respond if major customers cut back on AI spending, Liu said a decline in demand from one customer could be offset by growth in others.

But an industry-wide slowdown will pose an even bigger challenge for Foxconn and the broader AI supply chain.