Foxconn Targets 50% AI Server Share

Foxconn expects to control half of the world's AI server market within two years, according to Chairman Young Liu. The company currently holds a 40% share of that specific sector, a figure Liu told CNBC's Christine Tan could rise to 45% as early as next year. He stated, "I think we can grow up to 50 percent."

Liu projects that AI infrastructure will generate 60% to 65% of Foxconn's total revenue in the next three to five years. This forecast excludes edge AI devices, which process data directly on local hardware. The company's production lines are currently booked solid for at least the next eighteen months, driven by consistent orders.

Most demand comes from AI model developers and cloud service providers. Governments and large enterprises have not yet adopted the technology at the same scale, though Liu described current demand as "quite strong." He warned against excessive expansion, noting that "Overinvestment will kill the company." Foxconn will maintain strict control over spending as it grows its AI operations.

The company plans to expand manufacturing in the United States to move higher up the supply chain. This shift aims to allow faster responses to rising U.S. demand. Initial U.S. production will focus on high-margin items, such as AI server racks and data center equipment, due to higher local labor and operational costs. Liu said that larger production scale in the U.S. could eventually reduce manufacturing expenses.

Foxconn is formally Hon Hai Precision Industry, best known for assembling Apple's iPhone. It now views AI infrastructure as its primary growth engine. The company aims to strengthen its position across the entire supply chain, covering servers, racks, data centers, and computing services. Annual spending on AI is currently planned at $3 billion to $5 billion, with potential for increases if vertical integration deepens.

Liu said Foxconn could offset a spending cut from one major customer with growth from others. However, he acknowledged that a broad industry slowdown would present a much larger challenge for the firm and the wider AI supply chain. The company remains focused on scaling production to meet current, strong market appetite.