Nvidia Partner Hon Hai Expands to Meet Surging AI Demand Amid ‘Crazy’ Growth

Hon Hai Precision Industry wants to increase the number of servers it has in order to keep up with the growing demand for Nvidia chips and to prepare for more investments in AI.

Hon Hai Precision Industry wants to add more servers because Nvidia chips are in great demand. Chairman Liu talked about Blackwell chips’ unexpected growth and announced a new assembly plant in Mexico. However, it was revealed that production delays for GB200 servers would happen.

Hon Hai Precision Industry is planning to add more servers to meet higher-than-expected demand for Nvidia chips that are used to build AI. This shows that the company thinks spending on AI will stay high.

The Chinese company is now building the biggest factory in the world to put together servers with Nvidia’s most powerful Grace Blackwell chips in Mexico. Liu said that Hon Hai will have a planned capacity of 20,000 GB200 NVL 72 servers in 2025. This was the first time that the size of the project was made public.

Chairman Young Liu told Bloomberg Television that demand for the next generation of Blackwell chips was “crazy.” Last week, Nvidia CEO Jensen Huang said the same thing.

A lot of people thought that the need for computing might be met soon. It looks like the need is still growing, though. That’s beyond what we thought, Liu said.

But Liu said there was a “hiccup” in the production of GB200 servers, which is more proof that Blackwell supply is behind schedule. He said that shipments would now start in the late fourth quarter instead of early in the third quarter, between October and December.

Still, Colette Kress, Nvidia’s Chief Financial Officer, said in August that the company plans to ship Blackwell chips worth a few billion dollars in its fiscal fourth quarter.