At its earnings call on August 14th, Taiwanese tech giant Foxconn addressed the progress of the highly anticipated launch of NVIDIA’s next-generation AI server, the GB200.

According to a report by Commercial Times, Foxconn confirmed that the development of the server cabinets is on schedule, and the company will be among the first suppliers to deliver, with shipments expected to begin in the fourth quarter. The company also expects significant growth throughout the year, driven by strong demand for AI servers.

Addressing concerns about the progress of its AI server business, Foxconn spokesperson James Wu stated that driven by strong customer demand, the company’s AI server revenue grew by more than 60% quarter-over-quarter in Q2, accounting for over 40% of its total server revenue.

Wu reaffirmed that the robust demand for AI servers is expected to continue, and the company maintains its forecast that AI servers will contribute 40% of its total server revenue for the year.

Additionally, Foxconn has observed strong demand from various types of customers for the new generation of AI cabinet solutions, which is expected to significantly contribute to its server revenue in 2025.

Previously, per a report from The Information, NVIDIA’s GB200 is said to be experiencing yield issues, leading to a one-quarter delay in mass shipments. When asked about potential delays in the shipment of GB200 AI servers, Wu responded that the development timeline for the GB200 cabinets is on schedule.

In the second quarter, Foxconn reported revenue of NTD 1.55 trillion (roughly USD 48 billion), with a gross margin of 6.37% and earnings per share (EPS) of NTD 2.53.

For the first half of the year, its revenue reached NTD 2.87 trillion (roughly USD 88.9 billion), marking a 4% year-over-year increase. Gross margin, operating margin, and net profit margin were 6.37%, 2.83%, and 1.98%, respectively, all showing improvements compared to the same period last year, which stood at 6.21%, 2.58%, and 1.66%.

Cumulative EPS for the first half was NTD 4.12. Looking ahead to the third quarter, Foxconn expects operations to gain momentum as they enter the traditional peak season, with both quarter-over-quarter and year-over-year growth anticipated.

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• [News] Foxconn Remains Unfazed Despite NVIDIA’s GB200 Delay, with Customers Aim to Secure Their Orders
• [News] GB200 AI Servers Generate USD 210 Billion Annual Revenue, Boosting Supply Chain Growth

(Photo credit: Foxconn)

According to a report from The Information, NVIDIA’s “world’s most powerful AI chip,” the GB200, is said to be experiencing yield issues, leading to a one-quarter delay in mass shipments.

As per sources cited by a report from the Economic Daily News, it’s suggested that the problem likely lies in the yield rates of advanced packaging, mainly affecting the non-reference-designed GB200 chips.

The supply of the reference-designed GB200 chips remains stable, with Foxconn being the sole contract manufacturer receiving an adequate supply of these chips. Foxconn is set to ship according to the original schedule in the fourth quarter.

Furthermore, the sources cited by the same report point out that Foxconn is currently the only manufacturer able to meet the scheduled shipment of the GB200 in the fourth quarter. This is primarily due to Foxconn securing NVIDIA’s reference-designed GB200 chips orders, which are prioritized for shipment amid the supply shortage.

The term “reference-designed” refers to the GB200 AI servers ordered by NVIDIA for production at Foxconn and other manufacturers. These products are made according to NVIDIA’s reference designs and are not customized. Once produced, they can be sold to cloud service providers (CSPs) and other clients.

In contrast, “non-reference-designed” refers to customized versions of the GB200, which are tailored to specific customer requirements. The current yield issues are affecting the production of these non-reference-designed items, with the priority given to shipping the reference-designed products first.

Following the reports addressing the tight supply of GB200, customers are said to be scrambling to secure their orders from Foxconn due to its ample chip supply. Foxconn, traditionally silent on customer and order details, will reveal the latest status of its product lines during the press conference on August 14th.

The GB200 was originally scheduled for mass shipments starting in the fourth quarter of this year. However, over the weekend, reports emerged about yield issues, pushing the mass shipment timeline to the first quarter of next year, causing a stir among the market.

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• [News] GB200 AI Servers Generate USD 210 Billion Annual Revenue, Boosting Supply Chain Growth
• [News] Foxconn Rumored to Secure Exclusive NVIDIA GB200 AI Deal

(Photo credit: NVIDIA)

Amid Apple’s intention to reduce its dependence on China and promote India as another major iPhone production hub, Indian financial media outlet Moneycontrol has revealed in a report that Apple will manufacture the iPhone 16 Pro series in India, marking the company’s first production of high-end models in the country.

According to the report citing industry sources, Apple will further expand its manufacturing plans in India. It is expected that later this year, production of the iPhone 16 Pro and iPhone 16 Pro MAX will begin at Foxconn’s Sriperumbudur plant in Kancheepuram, Tamil Nadu, India.

Currently, the plant is said to be entering the new product introduction (NPI) phase for the iPhone 16 Pro series. Reportedly, if all goes well, it will then proceed to the mass production stage.

At the end of last year, Foxconn announced that its Indian subsidiary would expand its plant, marking one of Foxconn’s rare significant investments in India in recent years.

At the time, some have speculated that this move was a preliminary step in conducting the iPhone 16 series NPI in India. This would be the first time in iPhone history that NPI is conducted outside of China, indicating that Apple aims to establish India as another major global iPhone production hub.

The report further indicates that this strategy is part of Apple’s supply chain diversification efforts, aiming to reduce reliance on Chinese plants and enhance manufacturing capabilities in India. Apple hopes to increase the proportion of iPhones manufactured in India from the current 14% to 25% in the coming years.

Apple began its “Make in India” initiative in 2017 by assembling the first-generation iPhone SE. Since then, Apple has gradually expanded its iPhone production in India, assembling the iPhone 6S in 2018, the iPhone 7 and XR in 2019, the iPhone 11 in 2020, the iPhone 12 and iPhone 13 in 2021, and the iPhone 14 in 2022.

Previously, iPhone production in India lagged behind China’s mass production by about 6 to 9 months. Last year, for the first time, Apple began producing the iPhone 15 and 15 Plus in India immediately after the iPhone launch event. This year, Apple is taking a further step by producing the high-end iPhone 16 Pro series in India.

Additionally, Apple reportedly plans to start manufacturing iPads and AirPods in India later this year, highlighting Apple’s growing focus on the Indian market.

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• [News] Fuelled by AI Features, Apple’s iPhone 16 Shipments Reportedly to Increase by 10%
• [News] Apple Reportedly Doubles iPhone Production in India, while Foxconn Holds 67% Share

(Photo credit: Apple)

Masahiro Okitsu, President of Sharp, a subsidiary of Foxconn, announced in a joint interview with Japanese media that the Sakai Display Product (SDP) plant, which produces large-size LCD panels for TVs, will cease production earlier than planned. Initially scheduled for the end of September, the shutdown is now expected to occur in late August.

According to a report by Asahi Shimbun on July 16, Sharp President Masahiro Okitsu announced in a joint media interview that the SDP, which produces LCD panels for TVs, is expected to completely cease production after the Obon festival (late August). This interview marks Okitsu’s first media appearance since taking office as Sharp’s president on June 27.

Okitsu mentioned that around July 20, SDP will start put glass substrates into production, with the final batch of LCD panels produced a month later.

Sharp’s SDP land and plant will be transformed into an AI data center, and a collaboration with Softbank and KDDI has been announced. However, Masahiro Okitsu did not elaborate on this cooperation framework during the media interview on July 16th.

Regarding Foxconn Chairman Young Liu’s appointment as Chairman of Sharp, Okitsu stated that this makes the division of duties clearer. Foxconn will oversee and support Sharp, while the existing brand business operations will be managed by Sharp.

Okitsu also pointed out the goal of increasing the operating profit margin of the “brand business,” which includes products like white goods, to 7% by the 2027 fiscal year (compared to less than 5% in the 2023 fiscal year). He emphasized that achieving a return to profitability in the 2024 fiscal year is imperative.

Reportedly, with Foxconn’s technical assistance, Sharp also plans to enter the AI and electric vehicle (EV) businesses, with plans to launch in the 2026-2027 fiscal years.

On May 14, Sharp announced its financial report, indicating that due to impairment losses in its panel business, the net loss for the 2023 fiscal year (April 2023 – March 2024) reached JPY 149.9 billion, marking the second consecutive year with a net loss exceeding 100 billion yen. However, Sharp forecasts that for the 2024 fiscal year (April 2024 – March 2025), its consolidated operating profit will be JPY 10 billion, with a consolidated net profit estimated at JPY 5 billion.

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• [News] Foxconn Ventures into Advanced Packaging, Sharp to Follow with Production Capacity in 2026
• Sharp Announces Closure of Sakai Gen 10 Line, Supply Cut of 5 Million TV Panels Expected in 2025, Says TrendForce

(Photo credit: Sharp)

According to a report from Economic Daily News, Foxconn Group is advancing into the field of advanced packaging with a strategic alliance between Taiwan and Japan, focusing on the trending panel-level fan-out packaging (FOPLP). Following Innolux’s related developments in Taiwan, another of Foxconn’s invested companies, Sharp, has announced its entry into panel-level fan-out packaging in Japan, with production capacity expected in 2026.

Foxconn Group already possesses a comprehensive capability in the AI sector, and with the key advanced packaging technology now in place, they are fully mobilized. On the other hand, Sharp is undergoing a major transformation, which also benefits Foxconn— as its subsidiary Foxconn Technology is a major shareholder in Sharp, and Pan International is a partner with Sharp, both of which stand to gain from this transformation and provide support for it.

Pan International has previously collaborated with Sharp in areas such as wire harnesses, PCBs, and optical components, and has also acted as a distributor for Sharp’s panels and optoelectronic components. With Foxconn Chairman Young Liu concurrently serving as Sharp’s chairman, along with Sharp scaling down its panel business and expanding its semiconductor operations, there is significant interest in whether there will be new collaborations between the two companies.

Earlier, Sharp announced that it is partnering with Japanese electronic component manufacturer Aoi Electronics to advance into the field of advanced packaging. Reportedly, an agreement has been signed between Aoi, Sharp, and Sharp Display Technology, under which Aoi will utilize Sharp’s panel facilities to build a semiconductor back-end process production line. In 2024, Aoi will establish an advanced semiconductor panel packaging production line at Sharp’s Mie Plant, aiming for full-scale production by 2026 with a monthly capacity of 20,000 wafers.

Nikkei previously reported that Sharp continues to downsize its panel plants while expanding semiconductor production. Sharp noted that the advanced packaging production line will be used to produce Aoi’s FOLP. According to the agreement, the three companies are considering cooperation in the semiconductor back-end process to expedite the establishment of production lines and achieve full-scale production.

Read more

• [News] Foxconn’s Young Liu Newly Elected as Sharp’s Chairman to Assist Transformation
• Sharp Announces Closure of Sakai Gen 10 Line, Supply Cut of 5 Million TV Panels Expected in 2025, Says TrendForce

(Photo credit: Foxconn)