TL;DR:
- Nvidia partner Quanta Cloud Technology predicts a doubling of AI server sales in 2024.
- The company expects sustained demand as businesses integrate AI into operations and services.
- Quanta Computer’s stock price has more than doubled in 2023 due to AI technology’s popularity.
- Collaboration with Nvidia and efforts to increase production aim to alleviate the AI chip shortage.
- QCT’s AI servers account for 65% of revenue, differentiating between graphics processor-driven and traditional hardware.
- Major clients include Google Cloud, AWS, and Alibaba Group; competition with Foxconn and Wiwynn.
- Global AI server shipments are projected to grow by 29% annually from 2022 to 2026.
- Collaboration between QCT and Nvidia dates back to 2015, indicating a history of successful server product development.
- Despite US-China trade dynamics, QCT sees growth in the US, Germany, and Thailand production facilities while maintaining capacity in China.
Main AI News:
In the realm of cutting-edge technology, Nvidia Corp. finds a steadfast collaborator in Quanta Cloud Technology, a key partner, which projects an impressive twofold surge in artificial intelligence server sales come 2024. This surge in demand is anticipated to transcend the immediate horizon, as businesses progressively integrate AI into their core operations and service offerings.
The profound AI upsurge, according to President Mike Yang of QCT, a wholly-owned subsidiary of Taiwan’s esteemed Quanta Computer Inc., is poised to sustain its momentum, with a trajectory of growth that only intensifies in the years that lie ahead. In a compelling dialogue with Bloomberg Television, Yang accentuated the enduring ascent of AI, underscoring its resilience and enduring allure.
Partnering seamlessly with Nvidia, Quanta Computer is positioned at the forefront of innovation, constructing AI servers that encapsulate the remarkable potential of collaborative efforts. Notably, as Wall Street embraces AI technology as the harbinger of transformative change, Quanta Computer’s stock value, much akin to its Californian counterpart Nvidia, has experienced a surge of over 100% in the year 2023.
To meet the amplified demand for Nvidia’s avant-garde AI chips, collaborative efforts are at play amongst various component providers, as they jointly strive to augment production capacity. Mike Yang expressed his company’s dedication to this objective, with a commitment to ameliorate the prevailing scarcity of Nvidia’s cutting-edge AI chips. While refraining from a categorical promise of satiating all customer demands by the impending year, Yang remains optimistic.
Nvidia, echoing their resolute commitment, conveyed confidence in expanding supply to effectively cater to the escalating demand. Yang conveyed a profound belief in the upcoming resolution of supply constraints: “We have a very limited supply, but next year, I think Nvidia will solve everything.“
Within the expansive realm of QCT’s annual revenue, AI servers command a substantial 65% share, as affirmed by Yang. Delineating a crucial distinction, Yang characterized AI servers as inclusive of graphics processors, prominently including Nvidia’s models, in contrast to conventional processor-driven hardware where Intel Corp. retains dominion.
Goliaths in the technological realm, namely Alphabet Inc.’s Google Cloud, Amazon.com Inc.’s AWS, and Alibaba Group Holding Ltd., stand as premier clients of QCT. The vigorous competition manifests in rivals like Foxconn Industrial Internet Co. and Wiwynn Corp., operating within the niche of providing servers to cloud service providers, primarily across the United States and China.
As Taipei-based research firm TrendForce aptly notes, the global landscape anticipates a robust growth trajectory, with AI server shipments forecasted to proliferate at a compound annual rate of 29% between 2022 and 2026. Substantiating this insight is Nvidia’s consistent market surprises with sales forecasts that have consistently exceeded analyst and researcher predictions.
An anecdotal highlight in the course of Yang’s journey was the presence of Nvidia’s CEO Jensen Huang at QCT’s booth during a technology exposition in Taipei. The encounter materialized into a joint marketing endeavor, where Huang bestowed Yang the emblematic leather jacket, emblematic of Nvidia’s innovation spirit. Their synergistic collaboration dates back to 2015, with a shared commitment to forge superior server products.
Even as Yang, like his contemporaries, navigates the complexities of the US-China trade dynamics, he envisages a trajectory of growth. Envisioning growth in production facilities across the United States, Germany, and Thailand while retaining existing capacity in China, Yang is unequivocal in his conviction that China’s significance as a pivotal market cannot be dismissed.
“The overarching dominion of China remains indomitable,” Yang emphasized. “An equilibrium shall endure, wherein attention is directed both towards China and the expansive global landscape.”
Conclusion:
The projected doubling of AI server sales by Quanta Cloud Technology highlights the accelerating adoption of AI technology across businesses. With an established collaboration with Nvidia and strategic efforts to address supply shortages, QCT positions itself to capitalize on the growing demand for AI servers. This trend is indicative of the transformative impact of AI on various industries, as evidenced by the company’s robust growth and expanding global footprint.
