Foxconn chairman says cloud capex could near $1T in 2027

Foxconn Chairman Projects Cloud CapEx Near $1 Trillion in 2027

Capital expenditure by major cloud service providers has already surpassed $700 billion this year and could approach $1 trillion next year, Foxconn Chairman Young Liu told shareholders at the company’s annual meeting on Friday in New Taipei City, Taiwan.reuters

The projection underscores how demand for artificial intelligence infrastructure has reshaped the technology supply chain, eliminating the traditional mid-year seasonal slowdown that once defined the industry’s rhythm.

Foxconn Bets Big on AI Servers

“Their capital expenditures are our market,” Liu said, referring to spending by cloud providers. “It has already reached $700 billion, and their capital expenditure next year is expected to potentially reach $1 trillion. This gives us immense confidence in our future growth momentum.”ktwb

Liu said Foxconn expects its own capital expenditure to grow by 30% this year from last year’s T$174 billion ($5.55 billion) as it expands manufacturing capacity for AI servers. The company is also scaling production of co-packaged optics, a data transmission technology critical to next-generation AI infrastructure, with plans to deliver units this year to clients building large-scale AI systems.thehindubusinessline

Dell’s Raised Outlook Reinforces the Trend

The Foxconn chairman’s comments came one day after Dell Technologies raised its annual revenue forecast, projecting approximately $60 billion in AI server revenue for fiscal year 2027 — up from a prior estimate of $50 billion. Dell now expects total revenue between $165 billion and $169 billion for the year ending January 2027, a sharp increase from earlier guidance.yahoo

The back-to-back announcements from two of the largest players in the AI hardware supply chain paint a picture of demand that continues to accelerate. Nvidia CEO Jensen Huang has described AI infrastructure investment as being in the early stages of a long-term industrial buildout.

A Market Transformed

Research firm TrendForce estimates AI server shipments will grow more than 28% this year, with total AI training compute power across the five largest North American cloud providers expected to increase over 56% year-on-year. AI inference compute is projected to surge roughly 122%.pcbshop

For Foxconn, the world’s largest contract electronics manufacturer, the spending wave represents a structural shift rather than a cyclical peak. Liu told shareholders he was “very optimistic” about the second half of the year.reuters