Hon Hai: Building the world's largest NVIDIA super chip factory, GB200 expected to ship in the fourth quarter

Foxconn announced that it is building the world's largest NVIDIA GB200 chip manufacturing factory in Mexico to meet the booming demand for Blackwell chips in the AI market.

On Tuesday, at the Hon Hai Annual Technology Day, Benjamin Ting, Senior Vice President of Foxconn's Cloud Enterprise Solutions Business Group, said, "We are building the largest GB200 manufacturing factory on Earth. Everyone wants to use NVIDIA's Blackwell chips, and the demand is enormous." Liu Yangwei, in a recent interview with Bloomberg, stated that the demand for Blackwell chips has reached a "crazy level."

Liu Yangwei, Chairman of Foxconn's parent company Hon Hai Precision, stated during the event that the company's supply chain is ready for the AI revolution. Foxconn's manufacturing capabilities include "advanced liquid cooling and heat dissipation technologies required for supplementing the GB200 server infrastructure."

He also mentioned that Hon Hai is the first company globally to ship NVIDIA's GB200 AI chip. Not only chips, but also key AI components, modules and boards, servers and cabinets, high-performance switches, and even AI data centers, Hon Hai will be the first company to mass produce and ship products equipped with these super chips.

In an interview with CNBC on Monday, Liu Yangwei stated that the company is expected to deliver the NVIDIA GB200 chips in the fourth quarter of 2024.

It is worth noting that Liu Yangwei added that the demand for AI servers has exceeded expectations, and the shipment of GB200 servers may be "slightly delayed."

After the news was announced, Hon Hai Precision's Taiwan stock price fell by 1.7% to NT$194 per share.

Supercomputing Center Expected to Start Operations Next Year

According to NVIDIA's official website, the Blackwell supercomputing center being built in collaboration with Hon Hai has commenced in Kaohsiung, Taiwan. The first phase of the project is expected to start operations in mid-2025, with full deployment completed by 2026.

The collaboration between Hon Hai and NVIDIA will revolve around the Blackwell architecture and utilize the GB200 NVL72 cabinet, which includes a total of 64 racks and 4608 Tensor Core GPUs.

Hon Hai plans to reach a capacity of 20,000 NVIDIA NVL72 cabinets by 2025. Liu Yangwei stated that Hon Hai's vertical integration capabilities, including advanced liquid cooling and heat dissipation technologies to support the GB200 server infrastructure, will be based on the GB200 chip. In other words, NVIDIA's Blackwell chip will be the core of Hon Hai's Kaohsiung supercomputing center.

Liu Yangwei mentioned that AI has already integrated into daily life and holds commercial value for enterprises. It is evident that the demand for AI is very exciting, and facing the current changes, "Hon Hai's supply chain is ready!" He pointed out that the AI revolution is not only happening in Hon Hai's factories in Taiwan, but also across the Americas, Asia, covering Hon Hai's existing facilities, planned factories, and parks under construction.

"Hon Hai started from manufacturing connectors, and now provides system solutions, continuously developing more complex core technological capabilities."

"AI devices are the next growth opportunity"

Liu Yangwei stated that the investment frenzy in AI infrastructure by enterprises will continue, as advanced language models like OpenAI are becoming increasingly intelligent with each new iteration.

"The overall trend in the tech industry today is to develop AI that is as smart as or even smarter than humans, namely Artificial General Intelligence (AGI). If intelligence is divided into four different levels, the current development is still at the second level, so there is still some distance to go before AI is fully mature and applied."

He mentioned that the increasing intelligence of AI is only good news for the AI server industry, which is positive for Foxconn's growth this year.

"I believe that there is still some time for the development of the AI server industry." He added, "With the continuous enhancement of AGI capabilities, AI devices will be another industry that we should closely monitor."

Hon Hai's financial report released on Saturday showed better-than-expected sales.

The company's third-quarter revenue was NT$1.85 trillion, a year-on-year increase of 20.15%, reaching a new high for the same period in history, higher than the analysts' general expectation of NT$1.78 trillion; the third-quarter net profit was NT$35 billion, a 6% increase year-on-year, setting a new high for the same period in history. The company stated that this growth "exceeded the initial expectations significantly."