Nvidia partner Hon Hai ramps up capacity to meet ‘insane’ AI demand

(Bloomberg) — Hon Hai Precision Industry Co . (2317.TW, HNHPF) plans to increase server capacity to meet stronger-than-anticipated demand for Nvidia Corp chips. (NVDA) used for AI development, reflecting its expectation that AI spending will remain high.

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Chairman Young Liu told Bloomberg Television that demand for Blackwell’s next-generation chips was “crazy,” echoing similar remarks from Nvidia Chief Executive Jensen Huang last week.

The Taiwanese company is now building the world’s largest assembly plant for servers housing Nvidia’s most advanced Grace Blackwell chips in Mexico. Hon Hai will have a planned capacity of 20,000 GB200 NVL 72 servers in 2025, according to Liu, revealing its scale for the first time.

“There has been a lot of talk that the need for computing could be saturated pretty soon. But it seems that demand is still growing. So this is beyond our expectations,” Liu said.

However, Liu said there was a “hiccup” in the production of GB200 servers, again confirming a delay with Blackwell’s supply. Deliveries are now expected to start at the end of the fourth quarter, not the beginning of the October-December period, he said.

Still, Nvidia CFO Colette Kress said in August that the company expects to ship several billion dollars worth of Blackwell chips in the fiscal fourth quarter.

— Courtesy of Lauren Faith Lau.

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