Data Center Hardware

the summary).Foxconn, traditionally a smartphone assembler, is now a key Nvidia partner, producing AI‑optimized server racks that drove a 26% YoY revenue rise to NT$844.3 bn (≈US$27 bn) in November. AI server sales offset a 6% monthly dip in consumer electronics, boosting Q3 profit 17% YoY. The firm launched a Taiwan AI manufacturing hub with Nvidia, invested in data‑center specialist TECO, and partnered with OpenAI on hardware. This pivot promises higher margins, greater capital spend, and geographic diversification, lifting its share price 26% YTD and positioning Foxconn as a central player in the expanding AI infrastructure market.

Data center hardware stocks, including Dell and HPE, plummeted following Morgan Stanley downgrades, driven by concerns over margin pressure from rising memory costs. An “unprecedented pricing supercycle” fueled by hyperscale demand has pushed hardware valuations high, but analysts warn rising DRAM/NAND prices could squeeze margins. Dell is particularly vulnerable, drawing parallels to the 2016-2018 memory cycle where OEMs struggled to offset rising costs. Analysts foresee continued margin pressure for PC makers like Dell in the next 12-18 months, requiring proactive cost mitigation.