Foxconn Boosts Nvidia: A Technological High-Flyer

Foxconn, the world's largest electronics contract manufacturer, has given a significant boost to Nvidia with its announcement: The demand for artificial intelligence (AI) servers seems to remain strong. During Foxconn's annual Technology Day, officially called Hon Hai Precision Industry, the establishment of the world's largest facility for assembling AI servers in Mexico was announced. In this megafactory, Nvidia's GB200 chips, a key component of the Blackwell AI architecture, are to be installed. Foxconn's Chairman Young Liu revealed in an interview with Bloomberg Television that the company aims to produce 20,000 GB200 NVL72 servers in the factory by 2025. Analysis by HSBC forecasts that such a server could cost approximately three million dollars. Foxconn's Senior Vice President for Cloud Solutions, Benjamin Ting, emphasized at the event that the demand for Nvidia's Blackwell system is "huge." Liu simply described the demand as "crazy," an assessment recently echoed by Nvidia CEO Jensen Huang. The news caused Nvidia's stock to rise by 3.5% early Tuesday afternoon, thus continuing the gains from the previous day, when Nvidia surpassed Microsoft to become the second most valuable company in the U.S. The stock, which was traded near 133 dollars on Tuesday, is approaching its record closing high of 135.57 dollars, which was reached on June 18. The previous intraday record stands at 140.76 dollars and was set on June 20. Nvidia's shares have more than doubled this year after recovering from a summer low. At that time, reports were circulating about a design flaw that could delay the launch of the Blackwell system, coinciding with a sell-off of major technology stocks. These losses fueled doubts among Wall Street investors regarding the wisdom of the enormous expenditures for AI.