Foxconn has exclusively secured a substantial order for the NVLink Switch, a critical component of NVIDIA’s GB200 AI servers, according to a report from Economic Daily News. This order, which follows Foxconn’s significant deal for the assembly of GB200 servers, is estimated to be seven times larger than the server cabinet order and comes with a significantly higher gross profit margin.
While Foxconn typically does not comment on specific orders or customers, industry insiders note that NVLink technology, exclusive to NVIDIA, consists of bridge and switch components. The bridge connects the central processing unit (CPU) with the AI chip (GPU), while the switch interconnects multiple GPUs, enabling thousands to operate together and maximize computing power.
The GB200 AI server, known for its substantial computing power and high-speed transmission capabilities, relies heavily on NVLink technology to enhance performance. This new order underscores Foxconn’s longstanding relationship with NVIDIA and its expertise in manufacturing network communication equipment, making it a natural choice for this high-profile deal.
Each GB200 server cabinet requires seven NVLink switches, indicating that for every server cabinet produced, Foxconn will manufacture seven NVLink switches. This arrangement, with its higher profit margins, is expected to significantly boost Foxconn’s operations.
Foxconn’s dominance in the global switch market is reinforced by its clientele, which includes top companies like Dell, HP, Cisco, Nokia, and Ericsson. The company holds over 75% of the global market share in switches, establishing a firm leadership position.
Regarding the AI server market, Foxconn Chairman Young Liu has highlighted the high demand for the GB200. He projects that Foxconn’s market share in AI servers could reach 40% this year, driven by the robust demand and the strategic NVLink order.
This exclusive deal not only enhances Foxconn’s profitability but also solidifies its market presence in the rapidly growing AI and server sectors, positioning it as a key player in the industry.
