Apple supplier Foxconn plans to manufacture AI servers in India
Apple supplier Foxconn is planning to manufacture artificial intelligence (AI) servers in India, as part of its broader strategy to diversify beyond phones, according to The Economic Times. The company will likely utilize its existing manufacturing facilities in Tamil Nadu for the production of AI servers. "They (Foxconn) can make pretty much anything since they are contract manufacturers, it could be phones, servers, or EV components," the ET reported, quoting a a source.
Foxconn's role in global AI server production
Foxconn, a major player in building AI servers for global technology giants such as Amazon, Google, Microsoft, and NVIDIA, is exploring opportunities in the Indian market. This development comes as Foxconn subsidiary Rayprus Technologies plans a facility in Bengaluru. The company's strategic shift from China is due to disruptions caused by COVID-19 and geopolitical tensions.
Recent investigation over hiring practices
Foxconn, which has been expanding its presence in India, is currently under investigation by the Ministry of Labour and Employment over allegations of discriminatory hiring practices at its iPhone plant in Tamil Nadu. Although the company has refuted allegations of such practices, if proven true, they would constitute a clear violation of Section 5 of the Equal Remuneration Act, 1976 which prohibits recruitment discrimination based on gender.
Advanced talks with Google for Pixel production
Foxconn is reportedly in advanced talks with Google to manufacture Pixel smartphones in Tamil Nadu. This move signifies a major expansion for the Taiwanese contract manufacturer known for assembling Apple iPhones. "This strategy aligns with their need to diversify beyond phones, especially as they are overly dependent on Apple," another source told ET.
AI servers expected to boost Foxconn's global market share
Foxconn expects its global market share for AI servers to rise to 40% this year from 30% in the previous year, according to ET. Chairman Young Liu stated at the annual shareholders' meeting that AI servers would "soon become Foxconn's next-trillion revenue product." Industry experts believe that making EV components and servers could be the next growth area for Foxconn in India due to higher margins compared to mobile phone assembly.
