Foxconn Enters SpaceX Supply Chain for First Time, Wins $52 Billion AI Server Order

TradingKey - Foxconn has reportedly secured its first-ever AI server assembly order from SpaceX ( SPCX) AI server contract manufacturing order, with the total value expected to reach $52 billion if the project is fully realized.

It is understood that SpaceX plans to build a new round of large-scale AI computing infrastructure, procuring approximately 13,000 AI server cabinets equipped with Nvidia's GB300 platform. Calculated at about $4 million per cabinet, the overall order size is around $52 billion.

Source: X

Sources revealed that Foxconn's previous revenue planning for its AI business had not factored in this order. As the partnership materializes, the company's growth momentum over the next few quarters is expected to be further bolstered.

For Foxconn, this not only represents a major new order but also carries significant strategic importance.

In the past, SpaceX's AI server manufacturing was primarily handled by U.S. vendors such as Dell and Supermicro. Foxconn's successful entry this time means it has officially entered Elon Musk's AI ecosystem supply chain. It also completes its client footprint among major North American cloud service providers, further consolidating its leading position in the global AI server market.

SpaceX Continues Expanding Computing Power, Foxconn to Undertake GB300 Server Manufacturing

With the rapid growth in demand for AI model training, SpaceX is continuously expanding its data center capacity. According to reports, shipments of the newly procured GB300 servers are expected to begin in the fourth quarter of this year and run through the first quarter of next year, primarily to support SpaceX's latest round of AI computing power infrastructure buildout.

In recent years, besides meeting its own AI research and development needs, SpaceX has been steadily expanding its AI cloud services footprint. The company is reportedly partnering with the U.S. Department of Defense to provide AI data center computing resources. It has also signed long-term computing power service agreements with companies such as Google and Anthropic, continuing to offer GPU leasing and AI infrastructure services to external clients. As its customer base expands, SpaceX's demand for high-performance AI servers has risen rapidly.

Market observers believe this additional procurement not only reflects SpaceX's continued ramp-up of its AI infrastructure, but also indicates that its future cloud computing business still has substantial room for expansion.

Hon Hai Earnings Estimates Seen Continuing to Be Revised Up

Analysts pointed out that the addition of SpaceX orders is expected to further improve Hon Hai's earnings visibility for the coming quarters.

Previously, Chairman Young Liu stated that the company expects its global AI server market share to surpass 40% by 2026, full-year AI rack shipments are expected to achieve multiple-fold growth, and shipment volumes are projected to expand quarter-by-quarter by the end of the year.

Currently, cloud and networking products centered on AI servers have become Hon Hai's largest business segment by revenue share, and are also one of the group's fastest-growing core businesses for the future.

Judging from its latest operating performance, Hon Hai's AI business has entered a rapid volume expansion phase. In the first quarter of this year, the company's net profit after tax reached NT$49.919 billion (approximately $1.547 billion), up 19% year-on-year to hit a record high for the period, with the AI server business serving as the primary growth driver.

Meanwhile, its subsidiary Foxconn Industrial Internet previously released an earnings preview, forecasting a year-on-year net profit growth of 86% to 101% for the second quarter, further reinforcing market optimism regarding Hon Hai's second-quarter performance.

Since previous market forecasts have not yet fully reflected the contribution of SpaceX orders, if the subsequent cooperation progresses smoothly, there remains potential for further upward revisions to Hon Hai's full-year revenue and earnings forecasts.

Hon Hai’s Key Advantages in Vying for AI Orders

Foxconn's ability to secure this order does not rely solely on its manufacturing scale.

In recent years, the company has continuously refined its global manufacturing network, establishing a comprehensive AI server production system in North America, Asia, and other regions to rapidly respond to the needs of large-scale customers. Meanwhile, its continuous investment in key AI server technology areas, such as liquid cooling, high-speed interconnects, and optical communications, has provided it with one-stop delivery capabilities ranging from component integration to complete system manufacturing.

In addition, Foxconn has continued to advance its layout in next-generation high-speed interconnect technologies this year, such as co-packaged optics (CPO). As the computing power of AI servers continues to rise, traditional electrical connections are gradually approaching their performance bottlenecks, and CPO is widely regarded as an important development direction for future high-speed data centers.

The market believes that positioning itself early in relevant technologies will help Foxconn further enhance the competitiveness of its AI server products and strengthen its capability to secure large-scale AI infrastructure projects in the future.