Foxconn is projected to become the largest server vendor in the world by 2024, powered by increased demand for AI technology and strong partnerships with NVIDIA. According to estimates by Omdia, Foxconn is expected to lead the global server market, positioning itself ahead of significant competitors like Dell, which has held the top spot since 2018.

The substantial demand for AI-optimized servers from major U.S. cloud providers, including Microsoft, Amazon, Google, and Meta, is driving this change. These four firms are anticipated to represent nearly half of the total capital expenditures in data centers for 2024, significantly influencing the competitive landscape of the server market. As highlighted by Vlad Galabov, Senior Director at Omdia, manufacturers aligned with NVIDIA are flourishing, as the development and deployment of AI applications take precedence.

Foxconn’s rise is not isolated; other vendors are also benefiting from the surge in AI server demand. Companies like Super Micro, ZT Systems, and Quanta Cloud Technologies are projected to see their server revenues grow by over 100% in 2024. Dell is securing essential contracts with firms such as xAI and CoreWeave, emphasizing its strategic moves within this competitive environment. Manoj Sukumaran, a Senior Principal Analyst at Omdia, noted that 2024 will be a significant year for all server vendors due to this market growth.

The server market in 2024 is notable for its concentrated investments, with Omdia reporting that just ten vendors are set to account for around 60% of the global server investment. This reflects a market dominance where a few players meet a significant portion of demand.

Foxconn’s collaboration with NVIDIA to create Blackwell GPU reference designs positions it for continued growth. The company is set to supply NVL36 and NVL72 racks to cloud service providers, marking a crucial step in its market strategy. Looking ahead to 2025, further growth in the data center sector, particularly in server capital expenditures, is anticipated, reaching an estimated $280 billion. This robust expansion is expected to continue throughout the decade, projecting the server market to reach $380 billion by 2028 and over half a trillion dollars by 2030.

Galabov emphasized that the development of AI-specialized cloud service providers is just beginning. He noted that in 2025, CoreWeave could surpass Oracle in server capital expenditures, which are set for considerable increases.

However, the fast-paced growth in AI manufacturing faces challenges; many highly regulated industries have reported that the necessary legislative frameworks will not be ready by 2024. Additionally, investment levels were constrained by GPU shortages in 2024, although these issues are expected to resolve in 2025, allowing for more substantial investment in AI infrastructure.

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