Foxconn Secures NVIDIA GB200 Orders

Foxconn (2317) continues to advance in the AI sector with notable achievements. Following its acquisition of substantial NVIDIA GB200 AI server manufacturing orders, Foxconn has secured an exclusive contract for critical components, specifically NVLink switches. This order volume exceeds seven times the number of server cabinets, promising significant profit margins compared to traditional server assembly operations. This development is poised to bolster Foxconn's financial performance.

Foxconn typically refrains from disclosing specific details about orders and client relationships. Industry experts highlight NVLink technology, developed exclusively by NVIDIA, which includes essential bridge and switch technologies. These innovations enable seamless connectivity between CPUs and GPUs, as well as inter-GPU connections, optimizing collective computing power.

Supply chain insiders emphasize the GB200's focus on both enhanced computational capabilities and high-speed data transmission, with NVLink playing a crucial role in boosting processing power. Foxconn's exclusive handling of NVIDIA's NVLink manufacturing underscores their longstanding partnership and mutual trust. Leveraging their expertise as a premier manufacturer in networking and communication equipment, Foxconn was a natural choice for NVIDIA to fulfill these critical orders.

Each server cabinet requires seven NVLinks, indicating that Foxconn's NVLink switch orders are seven times the number of GB200 server cabinets manufactured. With higher profit margins compared to server assembly, this agreement is expected to significantly contribute to Foxconn's operational success.

Foxconn holds a dominant position globally, supplying key components to top switch manufacturers worldwide, including Dell, HP, Cisco, Nokia, and Ericsson. This underscores Foxconn's leadership with over 75% market share in the global switch market.

Regarding the AI server market outlook, Foxconn Chairman Liu Yangwei previously noted strong demand for the GB200, surpassing supply expectations. This positions Foxconn's projected AI server market share to potentially reach 40% this year. Industry analysts recognize Foxconn Group as Taiwan's leading provider of comprehensive AI server solutions, encompassing vertical integration from components, cooling systems, liquid cooling solutions, servers, switches, chassis, to data centers, ensuring flexibility to meet evolving customer needs.