NVIDIA is using Foxconn as the sole supplier of NVLink switches for next-gen GB200 AI servers

Foxconn has won exclusivity on manufacturing NVIDIA's new NVLink switches for its next-gen GB200 AI servers, a key component of GB200, which is known as the "magic weapon for improving computing power".

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In a new report from UDN, we're learning that the order volume in 7x that of the GB200 AI server cabinets, where it's not just a new order, but the gross profit margin is also "much higher" than that of server assembly. It will become a powerful tool for Foxconn's gross profits and supplement its profits.

Foxconn has never commented on its orders or customer dynamics, but the industry has highlighted that the exclusive technology behind NVIDIA's new NVLink consists of two parts. First is the bridge technology, which connects the CPU and the AI chips together, while the other is the switch technology, which is the key to the interconnection between the GPUs.

With this technology, the computing power of thousands and thousands of GPUs can work together, operating at untold levels of AI power. NVLink is the magic technology for this, with Foxconn cooperating with NVIDIA over the years, but now this is taking it to another level as NVIDIA prepares to completely take over the AI industry, more so than it already has now.

• Read more: NVIDIA's new GB200 AI servers led by Foxconn with 40% and Quanta with 30%: ships in Q3 2024
• Read more: NVIDIA's next-gen GB200 AI server cabinets to ship in 'small quantities' in Q4 2024
• Read more: NVIDIA's new GB200 Superchip costs up to $70,000: full B200 NVL72 AI server costs $3 million
• Read more: NVIDIA DGX GB200 AI servers expected to sell 40,000 servers in 2025
• Read more: NVIDIA's next-gen GB200 AI server chips go into mass production in September
• Read more: Quanta to make NVIDIA GB200-based AI servers for Google, Amazon, and Meta
• Read more: NVIDIA GB200 Grace Blackwell Superchip: 864GB HBM3E, 16TB/sec bandwidth
• Read more: NVIDIA's full-spec B200 AI GPU uses 1200W of power, Hopper H100 uses 700W

Foxconn has been a leading OEM for network communication equipment, so NVIDIA "naturally handed" over the relevant orders to the company. Supply chain sources told UDN that just a single GB200 AI server cabinet requires 7 x NVLinks, meaning that the number of GB200 AI server cabinets that Foxconn receives is 7x the order volume of NVLink switches.l

Due to the gross margin ratio of the NVLink switches, the server assembly business is "much higher" and will "significantly affect" Foxconn's operations. It's also reported that the world's top 7 switch manufacturers -- Dell, HP, Cisco, Nokia, Ericsson, and more -- are all customers of Foxconn, meaning that Foxconn's global switch market share is over 75%, making them the leader in network switch manufacturing.

Foxconn is currently Taiwan's benchmark manufacturer with the most energy for complete AI server solutions, including components, cooling, liquid cooling systems, servers, switches, chassis, cabinets, and data centers. Foxconn's future is looking very, very bright... thanks to NVIDIA it'll be a force to be reckoned with in the AI era moving forward.