In today’s digital economy, companies using the latest technologies are becoming key players in the global market. This time, international attention is focused on Foxconn, which could become the first non-US company to dominate the server market by the end of 2024. Forecasts predict that total capital spending on servers in 2024 will reach $229 billion. dollars, with a notable amount of $29 billion. attributed to Foxconn.
Driving Foxconn’s rise is growing demand from major US cloud service providers such as Microsoft, Amazon, Google and Meta. These tech giants are increasingly looking for servers optimized for AI workloads. As cloud technologies and artificial intelligence continue to fuel economic growth, Foxconn is strategically carving out its niche in the market. Given projected shipping volumes, this ODM business is poised for exponential growth in 2024, surpassing Dell at $25 billion by the end of the year.
Interestingly, in 2018, Dell overtook HPE, which now only projects $13 billion in server revenue in 2024. This ongoing shakeup within the server market appears to be working in Foxconn’s favor.
Amid growing competition, it is worth noting that in 2024, the four largest cloud service providers will account for almost half of all data center spending. These companies are strengthening their position in the highly competitive server market and driving demand for cutting-edge solutions, particularly those designed for AI workloads. Notably, the growing demand for AI-ready servers has coincided with Microsoft stock chart showing consistent upward momentum, reflecting the growing value of AI and cloud infrastructure to its business model. Vendors Collaborating with NVIDIA Thrive in AI Application Development and Deployment take center stage.
Meanwhile, other players are making notable progress. Quanta Cloud Technologies (QCT) ranks fifth with $15 billion, while ZT Systems and Super Micro Computer, each with $19 billion, more than doubled their server sales in 2024. However, the landscape is far from be static. AMD has acquired ZT Systems, but plans to sell the manufacturing division, including Inventec’s stake in ZT Systems. In contrast, Super Micro has faced setbacks, losing significant orders that raise questions about its future in this competitive market.
Dell also had a strong end to the year, securing new strategic customers such as CoreWeave and xAI. The company has expanded its offering to include professional services and reference projects, including AI consulting. To remain competitive, Dell and others will need to embrace greater flexibility and innovative engineering, with some strategies drawing parallels with automated trading systems.
The overall trajectory of the server market indicates sustained growth over the coming decade. By 2028, the market is expected to reach $380 billion, and close to $500 billion by 2030. Although this growth suggests a peak is on the horizon, the current focus on cloud providers specializing in AI solutions highlights the transformative nature of these investments.
These trends create opportunities for both established players and emerging competitors like CoreWeave, which shows promise in challenging industry giants like Oracle by 2025.
As Foxconn accelerates its server business and secures massive orders from cloud providers, we are witnessing the dawn of a new technological era, in which ODM companies become indispensable players in the global server supply chain .