Foxconn is about to become the world’s largest server supplier

Taiwanese tech giant Foxconn could become the first non-U.S. company to become the global server market leader this year, according to Omdia, Data Center Knowledge reported. According to the forecast, total server spending in 2024 will be $229 billion, of which $29 billion will go to Foxconn.

Foxconn’s ODM business is set to grow astronomically in 2024, driven by growing demand from major US cloud providers for servers optimized to handle AI workloads. The company will soon surpass Dell ($25 billion at the end of the year), which, in turn, surpassed HPE ($13 billion in 2024) in the server market in 2018, analysts predict.

According to Vlad Galabov, senior director at Omdia, the four largest cloud providers—Microsoft, Amazon, Google and Meta✴—will account for nearly half of all data center capital expenditures in 2024, allowing them to gain greater leverage in a highly competitive industry. server market. “As AI application development and deployment dominates, vendors partnering with NVIDIA are thriving. These dynamics brought Foxconn to first place,” the analyst noted.

Image source: Foxconn

Quanta Cloud Technologies (QCT; fifth place, $15 billion), ZT Systems (ninth place, $19 billion) and SuperMicro (third place, $19 billion) also benefited from the surge in demand for AI-optimized servers, more than doubling their revenue. from server sales in 2024. At the same time, there have been changes in the market. AMD bought ZT Systems, but the manufacturing division will be sold. Inventec’s stake in ZT Systems will also go to AMD. But Supermicro is experiencing difficulties and has already lost a number of large orders.

The year ending was also successful for Dell, which gained new large strategic customers such as CoreWeave and xAI. It has also developed a portfolio of professional services and reference projects, including AI consulting services. “Despite the changes in rankings, all server vendors will see 2024 as a big year due to significant market growth,” said Manoj Sukumaran, lead analyst at Omdia.

Image Source: Omdia

Omdia noted that the consolidated nature of the investments made 2024 a unique year in the server market. Omdia predicts that 10 companies will account for nearly 60% of global server investment and 10 companies will satisfy more than 70% of market demand.

Omdia expects steady growth to continue throughout the decade, with the server market reaching $380 billion by 2028, approaching $500 billion in 2030. “We’ve only seen the tip of the iceberg in the formation and spending of AI-focused cloud providers. Their capital expenditure on servers should increase significantly, and CoreWeave will potentially surpass Oracle in 2025,” Galabov noted.