AI Servers Overtake iPhone Revenue in Taiwan’s Manufacturing Giants: A Shift Towards Artificial Intelligence Infrastructure
Taiwan’s manufacturing powerhouses are witnessing a significant shift in their revenue sources, with artificial intelligence (AI) infrastructure surpassing consumer electronics as the primary income generator for the first time in decades. This seismic change, which occurred within just three years, has forced industry leaders to reassess and diversify beyond traditional smartphone and laptop production.
Apple’s two-decade journey into building AI servers has been overshadowed by this rapid progression. The shift signifies a turning point that companies like Foxconn are navigating proactively, as they seek growth opportunities beyond traditional consumer electronics.
Taiwan’s dominance in global server manufacturing is largely due to its 90% share of AI server builds and approximately 80% of all server shipments worldwide. This dominance stems from decades of expertise in electronics manufacturing, which was initially developed through the notebook computer industry and has proven to be a significant advantage in the era of AI.
In the first seven months of 2024, Taiwan’s server production value reached NT$426.7 billion (approximately US$13.2 billion), surpassing the total value for the entire year of 2023 and representing an annual growth rate of 153.9%.
The impact on Taiwan’s manufacturing giants has been profound, with companies like Wistron and Quanta reporting significant revenue growth. For instance, Wistron’s revenue for January to July increased by 92.7%, while Quanta’s grew by 65.6% in the same period.
Foxconn, the world’s largest contract manufacturer, has seen a dramatic shift. Consumer electronics accounted for 35% of Foxconn’s total revenue in the second quarter of this year, while the cloud and networking business represented 41%. In contrast, consumer electronics accounted for 54% of its revenue in 2021, making AI servers and cloud infrastructure the first to overtake the company’s traditional smartphone manufacturing business.
Quanta Computer, a major player in server assembly, anticipates that AI servers will account for 70% of its total server revenue this year, thanks to improved yield rates and a better understanding of Nvidia’s GB300 chip-based servers. In the first half of 2025, AI servers already accounted for more than 60% of Quanta’s total server revenue.
The financial transformation in the sector has been striking. Quanta Computer expects AI servers to account for 70% of its total server revenue this year, with AI servers already accounting for more than 60% of its total server revenue in the first half of 2025.
Wistron, another significant player, has demonstrated the transformative impact of AI servers on manufacturing economics, with its revenue for January to July 2025 rising by 92.7% compared to the same period in the previous year. The dramatic growth reflects the premium nature of AI server manufacturing compared to traditional consumer electronics.
This shift extends beyond individual companies, reshaping Taiwan’s entire electronics manufacturing ecosystem. Traditional boundaries between different types of technology products are blurring as manufacturers develop new capabilities and forge closer partnerships with AI chip companies.
The transformation highlights Taiwan’s unique position in the global technology supply chain. The combination of advanced manufacturing capabilities, established relationships with major technology companies, and proximity to key semiconductor facilities has created a competitive advantage that continues to drive growth.
As artificial intelligence applications continue to demand more sophisticated computing infrastructure, Taiwan’s manufacturers appear well-positioned to capitalize on the increased demand. The challenge will be maintaining the country’s technology leadership while adapting to changing geopolitical and market conditions that may require more distributed global operations.
The shift from consumer electronics to AI servers exemplifies Taiwan’s ability to adapt and innovate in response to technological change, securing its central role in the global technology ecosystem.
