Foxconn to expand beyond iPhones, Plans to manufacture AI servers in India

Foxconn, the Taiwanese contract manufacturing giant known for assembling Apple’s iPhones, is expanding its manufacturing capabilities in India. The company has announced plans to produce AI servers at its existing facilities in Tamil Nadu, signifying a significant expansion of its operations in the country.

Foxconn aims to capitalize on the growing importance of artificial intelligence (AI) by manufacturing high-performance AI servers at its existing infrastructure in Tamil Nadu. These servers are crucial for training and running AI models and are in high demand by global tech giants such as Amazon, Google, Microsoft, and NVIDIA.

Foxconn’s agility as a contract manufacturer allows it to swiftly adapt to new ventures. While remaining a dominant force in smartphone assembly, the company is now venturing into AI server production in response to industry trends.

Industry experts view the move into AI server production as a natural progression, with Foxconn aiming to increase its share in the global AI server market from 30% to 40%.

Foxconn’s chairman, Young Liu, has indicated that AI servers could become the company’s next trillion-revenue product, highlighting the significant potential of this expansion.

Beyond iPhones

Beyond smartphone assembly, Foxconn is diversifying its production into electric vehicle (EV) components and servers, which offer better profit margins. The company is also taking advantage of India’s production-linked incentive (PLI) scheme for IT hardware to support its expansion plans.

In addition to AI servers, Foxconn’s Indian arm is investing about Rs 1,200 crore to construct a new factory and is building a mega factory outside Bengaluru primarily for Apple’s products, including iPhones. The company has also announced a $37.2 million investment in a joint venture with IT major HCL Group to establish a chip packaging and testing facility in India.

Despite its expansion, Foxconn faces allegations of discriminatory hiring practices at its Tamil Nadu manufacturing units, which are under investigation by the Ministry of Labour and Employment.

While AI servers are expected to significantly contribute to revenue growth, consumer electronics—especially smartphones—remain Foxconn’s primary source of income. The company’s initiatives in AI server production, driven by NVIDIA chips, are expected to further boost revenue through 2025.

Overall, Foxconn’s diversification into AI servers and high-margin products aims to reduce its reliance on smartphone manufacturing. With substantial investments and expansion plans in India, the company positions itself as a key player in the global technology manufacturing landscape.

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