Foxconn (OTCPK:FXCOF), the world’s largest contract electronics manufacturer based in Taiwan, has announced a partnership with Nvidia (NASDAQ:NVDA) to establish what they refer to as “AI factories.” These AI factories will deploy Nvidia’s chips and software for various applications, including self-driving cars.
Foxconn Chairman Liu Young-way and Nvidia CEO Jensen Huang unveiled this collaboration during Foxconn’s annual tech showcase in Taipei. They emphasized the emergence of a new manufacturing paradigm focused on the production of intelligence and how data centers function as AI factories.
Nvidia’s advanced GH200 super chip will be a key component used in these AI factories to process data and improve the intelligence of autonomous vehicles. The concept involves continuous data collection and enhancement of software to make self-driving cars smarter over time.
Jensen Huang noted, “In the future, every company, every industry, will have AI factories.” The partnership aims to leverage Foxconn’s manufacturing expertise and global scale to build AI factories across the world.
Nvidia, a prominent chip manufacturer and leader in AI technology, sees these AI factories as integral to the advancement of AI applications. They intend to utilize their powerful chips and software to drive the capabilities of these factories.
The announcement comes shortly after Nvidia revealed that new U.S. export restrictions would prevent the sale of certain high-end AI chips in China, including Nvidia’s GH200 super chip. Nevertheless, Nvidia’s shares have experienced significant growth in 2023 due to the high demand for their chips in AI applications.
Foxconn, which is primarily known for manufacturing Apple’s iPhones, is keen on expanding its success in producing personal computers and smartphones to the electric vehicle (EV) market. Earlier in the year, Foxconn and Nvidia entered into a partnership to develop autonomous vehicle platforms, aiming to manufacture electronic control units (ECUs) based on Nvidia’s DRIVE Orin chip for global distribution.
Foxconn’s aspiration is to transition from being a manufacturing service company to becoming a platform solution provider, focusing on smart cities, smart manufacturing, and the AI factory concept.
As part of their ongoing venture into the EV market, Foxconn unveiled a new electric cargo van named Model N at the event. They are actively seeking potential customers for EVs and components and see promise in countries like India and Japan for EV development.
Foxconn’s long-term goal is to capture nearly half of the global EV market, starting with a 5% target share and equivalent to $33 billion in revenue from EV and component manufacturing by 2025.
Foxconn’s Tech Day event coincided with the birthday of its founder, Terry Gou, who stepped down as the company’s chief in 2019. Gou is currently an independent candidate running for the position of Taiwan’s president in the upcoming elections.
Despite this exciting announcement, Foxconn’s shares closed down 0.9% on the day, compared to a 1.2% decline in the broader market.
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