TAIPEI, May 31 (Reuters) – Apple (AAPL.O) supplier Foxconn (2317.TW) said on Wednesday that artificial intelligence applications will spur demand for its server business this year, but 2023 is likely to be the largest for the company. It reiterated that it would eventually level off. About the global economic crisis.
Foxconn Chairman Liu Young-way said at its annual shareholder meeting that the company remains cautious about this year due to tighter monetary policy, geopolitical tensions and uncertainty over inflation, but growing interest in AI has pushed server said it was bright material.
“More and more people are using ChatGPT,” he said. “We see the AI server market rising at a much faster pace than expected. We expect triple-digit growth in the second half of this year.”
Taiwanese companies hold 40% of the global market share for servers and aim to expand that further, Liu added.
Foxconn’s cloud and networking products division, which includes servers, accounted for 22% of revenue in the first quarter, second only to smart home appliances, including smartphones, at 56%.
Foxconn said earlier this month that its first-quarter net profit fell 56%, the biggest quarterly drop in three years, below expectations and that its outlook for the full year is “limited.”
The world’s largest contract electronics maker wants to replicate the success Apple has had with the iPhone in electric vehicles (EVs).
Foxconn (formally known as Hon Hai Precision Industry) has bought a former General Motors (GM.N) plant in Rosetown, Ohio, and also hired former Nissan Motor (7201.T) executive Jun Seki. Hired to lead the expansion effort. We aim to become a major manufacturer of EVs.
The company is looking to expand its EV battery supply chain beyond Taiwan, possibly to the United States, Indonesia and India, Liu said.
Foxconn, which assembles about 70% of iPhones, is diversifying production out of China last year, when strict COVID-19 restrictions disrupted its largest iPhone factory. The company is also trying to avoid potential damage to its business from escalating trade tensions between China and Washington.
Liu said China, including its large iPhone factory in Zhengzhou, China, remains very important to Foxconn.
“The culture over there is very similar and the rules and regulations are a little different, but we have no problem with the people. So it is relatively easy to start a new initiative. ”
Reported by Ben Blanchard and Faith Hung.Editing: Christopher Cushing
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