Foxconn chairman says company holds about 40% of AI server market

Foxconn chairman Young Liu says the company holds about 40% of the global AI server market. He told CNBC that its share could reach 50% within a couple of years, potentially rising to around 45% next year. The claim comes from an interview with CNBC's Christine Tan.

He said Foxconn's production capacity is already fully booked for at least the next year and a half. He expects AI infrastructure to account for 60% to 65% of the company's revenue in the next three to five years, excluding edge AI devices, which run AI and machine learning algorithms directly on local hardware. He said demand so far has come mostly from AI model developers and cloud service providers, while governments and enterprises have yet to fully embrace the technology.

Foxconn, also known as Hon Hai, is best known as a major assembler of Apple's iPhones, and it has increasingly pushed into AI infrastructure. The company wants to expand its U.S. manufacturing and move further up the supply chain, from servers and racks toward entire data centers and computing services. Liu said higher U.S. manufacturing costs mean the company will start with higher-margin products, including AI server racks and data center equipment. He added that greater production scale there could eventually lower costs.

Liu also struck a cautious note about spending. He said Foxconn could spend more than its planned $3 billion to $5 billion a year on AI, depending on how far it expands its vertical integration. He said, "Overinvestment will kill the company." Asked what would happen if major customers cut back, he said weaker demand from one customer could be offset elsewhere. An industry-wide slowdown, however, would be a much bigger challenge for Foxconn and the broader AI supply chain.