Hon Hai Precision Industry Co., widely known for its manufacturing prowess, is ramping up server production to keep pace with the unexpectedly high demand for Nvidia Corp.’s AI chips. Chairman Young Liu recently described the appetite for the next-generation Blackwell chips as “crazy,” a sentiment that mirrors remarks from Nvidia’s CEO Jensen Huang.
Building the Future in Mexico
To meet this surging demand, Hon Hai is constructing the world’s largest assembly plant specifically for servers that will house Nvidia’s cutting-edge Grace Blackwell chips, located in Mexico. Liu announced plans to achieve a capacity of 20,000 GB200 NVL 72 servers by 2025, marking a significant expansion in the company’s manufacturing capabilities.
“There was a lot of speculation about a potential saturation in compute needs. However, it seems the demand continues to rise, surpassing our expectations,” Liu commented, reflecting the robust market for AI technology.
Navigating Production Challenges
Despite the optimistic outlook, Liu did acknowledge some challenges, describing a “hiccup” in the production of the GB200 servers. He confirmed delays in the supply of Blackwell chips, with shipments now projected to begin in late Q4, rather than the anticipated early October to December timeline.
Nvidia’s Chief Financial Officer Colette Kress, however, expressed confidence in the company’s outlook, stating in August that Nvidia expects to ship several billion dollars worth of Blackwell chips during its fiscal fourth quarter.
The Road Ahead
As AI technologies continue to evolve and shape industries, the partnership between Hon Hai and Nvidia is set to play a crucial role in meeting the insatiable demand for powerful computing capabilities. Both companies are navigating challenges while keeping an eye on the promising future of artificial intelligence.
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