Supermicro, a major beneficiary of the AI boom, saw its stock plunge after Ernst & Young resigned as its auditor, raising market concerns. According to a report from Liberty Times, citing Chinese media outlet Cailian Press, NVIDIA, which has close ties to Supermicro, is shifting orders that were previously directed to Supermicro to other suppliers in order to avoid market disruptions.

According to the report, Supermicro’s competitors, GIGABYTE and ASRock, have benefited from the order transfer, seeing an increase in new orders and customer inquiries.

On October 30th, Supermicro announced that Ernst & Young, one of the Big Four accounting firms, had severed ties with the company. In its resignation letter, Ernst & Young stated that it was “unwilling to be associated with the financial statements prepared by management” and could “no longer rely on management’s and the Audit Committee’s representations” regarding their relationship with Supermicro.

The report noted that this statement caused Supermicro’s share price to drop sharply, plunging 32% that day. The company is now facing the risk of delisting.

Previously, on August 27, Supermicro was accused of accounting violations, inadequate disclosure of related party transactions, and evading sanctions by selling products to Russia by Hindenburg Research. The following day, Supermicro also announced a delay in submitting its 2024 fiscal year 10-K annual report.

According to a report from Wall Street Journal in late September, Supermicro was under the investigation of the U.S. Department of Justice.

The report from Liberty Times citing Cailian Press indicated that if the rumors about NVIDIA’s order transfer turn out to be true, it would undoubtedly be a further blow to the troubled firm.

Read more

• [News] Supermicro Denies Short-Selling Claims, as its CEO Responds for the First Time After the Controversy
• [News] Taiwanese Supply Chain to Benefit from Supermicro’s Order Withdrawal, with Dell and HP as Potential Beneficiaries

(Photo credit: Supermicro)

On August 19, AMD announced its acquisition of ZT Systems, a cloud computing and AI data center equipment designer, for a total value of USD 4.9 billion. This move is intended to strengthen AMD’s AI computing capabilities, while hinting at its challenge to NVIDIA’s dominance in the AI market.

AMD plans to complete the acquisition in the first half of next year. Industry sources cited in a report from Economic Daily News interpret this move as AMD’s strategy to expand its AI chip market reach, extending its influence from chip design to system integration in the AI sector.

AMD CEO Lisa Su stated in an interview that ZT Systems generates over USD 10 billion in annual revenue, nearly half of AMD’s reported USD 22.7 billion revenue last year.

However, AMD plans to sell off ZT Systems’ manufacturing business after the acquisition is completed, while retaining its system design business. Per a report from Reuters, Su further explained that this decision is because AMD has no plans to compete with companies like Super Micro Computer.

“Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers,” said Lisa Su.

AMD will be able to offer a broader range of chips, software, and system designs to large data center clients like Microsoft and Meta after acquiring ZT Systems.

AMD also noted that once the acquisition is finalized, ZT Systems CEO Frank Zhang will remain in his position. In the statement, Frank Zhang expressed that joining AMD will help ZT Systems play a larger role in designing AI infrastructure that defines the future of computing.

Regarding concerns about the potential impact of AMD’s acquisition of ZT Systems on NVIDIA chip supplies, one of ZT Systems’ major shareholders Inventec reassured that existing orders for H100, H200, and GB200 chips will remain unaffected. Current collaboration projects will continue as planned, and the customer base will not change.

Read more

• [News] AMD’s Q2 Results Reveal Shift Towards AI Chips, Similar to NVIDIA’s Path
• [News] AMD Reportedly Eyes Mass Production in 2025 for Zen 6 Architecture with TSMC’s N3E Process
  

(Photo credit: AMD)

According to a report by Taiwan’s Economic Daily, Foxconn Group has achieved another triumph in its AI endeavors. The company has secured orders for over 50% of NVIDIA’s HGX GPU base boards, marking the first instance of such an achievement. Adding to this success, Foxconn had previously acquired an order for another NVIDIA DGX GPU base board, solidifying its pivotal role in NVIDIA’s two most crucial AI chip base board orders.

The report highlights that in terms of supply chain source, Foxconn Group stands as the exclusive provider of NVIDIA’s AI chip modules (GPU Modules). As for NVIDIA’s AI motherboards, the suppliers encompass Foxconn, Quanta, Inventec, and Super Micro.

Industry experts analyze that DGX and HGX are currently NVIDIA’s two most essential AI servers, and Foxconn Group has undertaken the monumental task of fulfilling the large order for NVIDIA’s AI chipboards through its subsidiary, Foxconn Industrial Internet (FII). Having previously secured orders for NVIDIA’s DGX base boards, Foxconn Group has now garnered additional orders from FII for the HGX base boards. This expanded supply constitutes more than half of the total, solidifying Foxconn Group’s role as a primary supplier for NVIDIA’s two critical AI chip base board orders.

Furthermore, Foxconn’s involvement doesn’t end with AI chip modules, base boards, and motherboards. The company’s engagement extends downstream to servers and server cabinets, creating a vertically integrated approach that covers the entire AI ecosystem.

(Photo credit: Nvidia)