Apple Inc (AAPL.O) supplier Foxconn said on Wednesday that artificial intelligence applications would powerfully drive demand for its server business this year. However, it reiterated 2023 overall would be flat for the company on global economic woes.
The world’s largest contract electronics manufacturer said revenue for cloud computing and data center customers would remain strong in the first half of this year, helped by the growth of its artificial intelligence products. “Foxconn’s AI solutions have proved to be very popular and are driving our server sales,” Foxconn Chairman Liu Young-way told a shareholder meeting on Wednesday.
As demand for servers increases, the Taiwanese chip maker is also working to bring AI-based technologies to edge devices such as computers, phones, and cars. Its latest processor, the Hailo-8, enables edge devices to run sophisticated deep-learning applications previously available only in the cloud.
In the future, it plans to use Hailo-8 to train driverless car sensors in the field to deliver more accurate information and reduce the time it takes to process a photo of a license plate or pedestrian. The processor also offers better privacy and lower latency than previous technologies, which are typically only able to operate at the edge of a network.
Foxconn said that the new processors have been in pilot tests for a few months at the company’s factories in China. It expects to launch them commercially this summer.
TSMC’s new chips are designed to be more power-efficient than previous models, reducing operating expenses and energy consumption by up to 60% while maintaining performance and reliability. The company also says its new processors will be more accessible for users to install and maintain, easing the burden on IT staff.
On the consumer side, TSMC expects demand to pick up in 2024 as the economy recovers and consumers begin replacing their older appliances and smartphones with newer ones. The company added that its new low-cost models should help it gain market share in those segments.
The firm is also continuing its quest to expand its EV battery production. It has bought a former GM plant in Lordstown, Ohio, and recruited former Nissan CEO Jun Seki to lead its EV expansion efforts in the United States and elsewhere.
Despite criticism of its treatment of workers, Foxconn remains a vital part of the global supply chain for many electronic goods and is seen as an example of how capitalism works. As economies develop, wages rise, and life should improve for everybody. However, consumers are still ruthless in pursuing the lowest prices and will continue to buy cheap Chinese products from companies such as Amazon and Alibaba. That is likely to continue for some time. Unless consumers change their habits and demand better treatment of workers, these factories will continue to employ many people in conditions that some find intolerable. The human cost of cheap consumer goods is high. It is a reality that must be accepted and understood by consumers worldwide.
