NVIDIA's Dominance in AI GPU Market Drives Sales Surge and Exceeds Expectations

According to an article in the Electronic Times, reliable sources from the supply chain have revealed that the system contract manufacturers for NVIDIA's A100/A800/H100 are Wistron and Foxconn (Foxconn). Currently, the orders are roughly divided equally between the two, but there will be adjustments in the manufacturing distribution in the second half of the year. Foxconn currently handles around 60% of the H100 orders, which will increase to 90% in the second half, while Wistron primarily handles the A100.

The market for electronic components is booming, and NVIDIA has almost monopolized the AI GPU market, making significant gains. The next biggest beneficiary is TSMC, which exclusively handles the wafer fabrication orders.

Thanks to the popularity of artificial intelligence and ChatGPT, there has been a surge in GPU chip sales. NVIDIA's first-quarter sales and net profits have exceeded the expectations of Wall Street analysts, and the company's outlook for the second quarter is also far above expectations. Following the announcement of the financial report, NVIDIA's stock price soared by 28% to $394.55 in after-hours trading, reaching a new all-time high. This increase has also boosted NVIDIA's market value by $200 billion, bringing the total market value close to $950 billion, nearing its historical peak.

Huang Renxun, the CEO of NVIDIA, stated that the AI market is experiencing an "iPhone moment." Similar to the launch of the first-generation iPhone, various mature technologies are leading the world into the era of smartphones. Now, mature AI technology is creating a new wave of business opportunities, from which NVIDIA will benefit.

The supply chain sources mentioned that the system contract manufacturers for NVIDIA's A100/A800/H100 are Wistron and Foxconn. Currently, the orders are divided equally between the two. However, there will be adjustments in the manufacturing distribution in the second half of the year. Foxconn, the leading high-margin manufacturer, currently handles around 60% of the H100 orders, which will increase to 90% in the second half. On the other hand, Wistron primarily handles the A100, and the A800, specifically designed for the Chinese market, has seen a decrease in Foxconn's manufacturing share from 40% to 10% over the quarters.

The report also mentioned that NVIDIA has had a close working relationship with Foxconn for many years. In addition to outsourcing the production of their high-end branded graphics cards to Foxconn in the past, they collaborated on the assembly of the SHIELD Android TV gaming console in 2015. In 2017, Huang Renxun personally announced partnerships with Foxconn, Quanta, and other major Taiwanese contract manufacturers to jointly develop GPU-driven data center products. In 2022, Foxconn's subsidiary, Foxconn Industrial Internet, announced plans to launch the world's first server system equipped with NVIDIA's Grace CPU superchip.