By Hamza Faisal
Foxconn has flagged a new collaboration with OpenAI, the world's biggest contract electronics manufacturer said on Friday, as the AI hardware boom reshapes its business. Chairman Young Liu told reporters at the company's annual Hon Hai Tech Day in Taipei that he had met OpenAI chief executive Sam Altman earlier in the day, and that an announcement would follow once details are confirmed.
Liu did not elaborate on the scope, timeline or financial terms of the new work. Any deal would build on last year's agreement between the two companies to design and engineer data-centre racks, components and other AI hardware, a partnership aimed at strengthening supply chains for AI infrastructure.
A deeper bet on AI infrastructure
Foxconn, formally Hon Hai Precision Industry, is Nvidia's biggest AI server maker and is increasingly relying on AI infrastructure for growth. The company has six factory buildings in Houston, Texas, where it manufactures AI servers for Nvidia, and Liu said it sees a need for further expansion there.
The shift is already visible in Foxconn's revenue mix. The company said in August that its cloud and networking products segment, which includes AI servers, accounted for 51 percent of second-quarter revenue, exceeding 50 percent for the first time. At this year's Tech Day, the company also debuted Nvidia's Spectrum-X CPO tray, an optical technology that moves the optical engine closer to the main switch chip.
Liu said Foxconn has been expanding production for AI data-centre servers across Taiwan, Vietnam, Mexico and the United States, and that its collaboration with OpenAI on AI data-centre hardware has been progressing well, with more concrete plans likely to be announced later.
No bubble, says Liu
The OpenAI news came with a confident message for investors who have grown nervous about AI valuations. While AI-sector stocks have been hit by concerns that heavy investment is not sustainable amid climbing borrowing costs, Liu said the industry was not in a bubble and that Foxconn expects to maintain double-digit growth next year.
"The argument that the AI industry is bubbling doesn't hold up," Liu told a group interview on the sidelines of the Tech Day event, pointing to demand he described as clear and strong. The remarks land at a moment when investors are scrutinising whether the enormous spending on AI will pay off, after a bruising week for some of the sector's biggest names.
What comes next
For now, the new Foxconn-OpenAI project remains a teaser rather than a finished deal. Neither company has said what exactly it will build, where it will be made, or how large it will be. But the direction is clear: Foxconn wants to move further up the AI value chain, from assembling other companies' products to co-designing the hardware that powers the AI era.
With demand for AI servers still outstripping supply, according to Altman, the world's largest electronics manufacturer is positioning itself at the centre of that bottleneck. The details, Liu promised, will follow.
