AI Factories To Be Built By Foxconn And Nvidia

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Foxconn, the world’s largest contract manufacturer, announced on Wednesday that it will collaborate with Nvidia to build a new type of data center. The data center will use Nvidia’s chips and software to support a wide range of applications, including self-driving cars. Foxconn Chairman Liu Young-way and Nvidia CEO Jensen Huang shared the news at Foxconn’s annual tech showcase in Taipei, where they described the new data center as an “AI factory.” 


According to Huang, the production of intelligence has given rise to a new type of manufacturing, and the data centers that produce it are AI factories. Foxconn has the expertise and scale to build these centers globally, he added. Huang went on to explain that AI factories could continuously receive and process data from autonomous electric vehicles to make them smarter. 


The announcement comes on the heels of Nvidia’s statement that new US export restrictions will block sales of two less powerful high-end AI chips it created for the Chinese market, along with one of its top-of-the-line gaming chips. Despite this setback, Nvidia’s shares have tripled in 2021, giving the company a market value of over $1 trillion, driven by excitement over the central role of the company’s chips in AI applications.


Foxconn, which is the largest supplier of Apple’s iPhones, has set its sights on replicating its success in assembling personal computers and smartphones as it expands into making electric vehicles for other companies. In January, Foxconn and Nvidia announced a partnership to develop autonomous vehicle platforms, in which Foxconn would manufacture electronic control units (ECUs) for cars based on Nvidia’s DRIVE Orin chip to sell to the global market.


Liu, standing next to Huang, said Foxconn is “trying to convert itself from a manufacturing service company to a platform solution company,” citing smart cities and smart manufacturing as other applications for AI factories. Foxconn’s latest electric cargo van, called Model N, was unveiled at the event, It is the sixth prototype in its EV push that has set ambitious goals but has so far only seen limited orders.


Jun Seki, head of Foxconn’s EV business, said the company was in talks with 14 potential customers, without naming them, and sees India and Japan as promising countries for EV development. Foxconn’s Tech Day takes place on the birthday of its billionaire founder, Terry Gou, who stepped down as the company’s chief in 2019. He is now running as an independent candidate for Taiwan’s president at elections in January and did not appear at the event, unlike last year when he drove on stage in a prototype EV.


Foxconn’s shares closed down 0.9% on Wednesday, compared with a 1.2% fall on the broader market (.TWII). Despite this, Foxconn remains optimistic that it can capture 5% of the global EV market and generate $33 billion in revenue by manufacturing EVs and components by 2025. The company’s aggressive long-term goal is to manufacture nearly half of the world’s EVs.

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