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Taiwan’s electronics manufacturing landscape is undergoing a dramatic transformation, with AI servers now driving more revenue than traditional consumer electronics like smartphones and laptops. This represents a pivotal shift for the island nation, traditionally known for assembling consumer devices. Taiwan currently commands over 90% of global AI server production and around 80% of total server shipments worldwide.

Data from Taiwan’s Ministry of Economic Affairs reveals the explosive growth of the sector. Server production value reached approximately US$13.2 billion in the first seven months of 2024, already exceeding the total for all of 2023, demonstrating a staggering 153.9% year-over-year growth. Leading manufacturers, including Wistron and Quanta, have reported significant revenue increases, highlighting the industry-wide impact of this surge.

Foxconn, the world’s largest electronics contract manufacturer, now attributes 41% of its revenue to cloud and networking products, including AI servers, eclipsing the 35% generated by consumer electronics. Quanta Computer, a key supplier of AI servers powered by Nvidia chips, anticipates that AI servers will constitute 70% of its total server revenue this year. The company has already secured orders for Nvidia’s cutting-edge GB200 servers and is actively expanding its production capacity to meet the growing demand.

While challenges such as potential market share erosion due to global manufacturing expansion exist, Taiwan’s sophisticated manufacturing expertise and established partnerships with leading technology firms uniquely position it to capitalize on the sustained demand for advanced AI infrastructure.