For decades, Taiwan’s electronics manufacturers built their fortunes assembling the world’s smartphones, tablets, and laptops. But a dramatic shift is underway: AI servers are now generating more revenue than iPhones for Taiwan’s leading technology giants, signaling a profound realignment of the island’s role in the global supply chain.
Taiwan’s dominance in AI server production
Taiwan commands an outsized position in global server manufacturing, accounting for more than 90% of AI server output and 80% of overall server shipments worldwide. This dominance stems from decades of expertise honed in the notebook computer era, which has now evolved into an edge in advanced server production.
According to Taiwan’s Ministry of Economic Affairs, server production from January to July 2024 reached NT$426.7 billion (US$13.2 billion), already surpassing the previous year’s total and marking 153.9% year-on-year growth.
Foxconn, Quanta, and Wistron pivot to AI
The shift is transforming the revenue mix of Taiwan’s largest firms. Foxconn, the world’s biggest contract manufacturer, now earns 41% of its revenue from cloud and networking infrastructure, compared with 35% from consumer electronics. Just three years ago, smartphones dominated 54% of its business.
Quanta Computer, Nvidia’s key partner for AI server production, reported that AI servers accounted for more than 60% of its total server revenue in the first half of 2025 and are on track to hit 70% for the full year. The company has secured orders from Microsoft, Amazon, Google, and Meta, and is scaling up to meet demand for Nvidia’s GB200 servers.
台北時報
Meanwhile, Wistron’s revenue from January to July 2025 surged 92.7% year-on-year, thanks to contracts for Nvidia’s HGX and DGX series as well as AMD’s MI300 AI boards. Nvidia recently booked an entire Wistron plant in Taiwan to secure dedicated AI server capacity.
Industry-wide transformation
This surge has reshaped the entire ecosystem of Taiwan’s original design manufacturers (ODMs). Multi-year production contracts, some extending into 2026, are providing revenue stability rarely seen in the volatile consumer electronics era.
“Monthly sales jumps for Taiwan ODMs in the first half of 2025 are evidence of this trend,” said Robert Cheng, head of Asia technology hardware research at BofA Global Research. “We think this shift toward AI servers, whatever form it takes, is good for Taiwan’s tech industry.”
But challenges loom. While Taiwan currently dominates AI server production, companies are expanding facilities in the U.S., Mexico, and elsewhere to meet geopolitical and supply chain requirements. This could gradually reduce the island’s overwhelming share of global output.
Strategic implications
AI servers demand far higher technical sophistication than assembling smartphones. Manufacturers must work closely with chip designers, adopt advanced quality controls, and support increasingly complex infrastructure needs. This has blurred traditional boundaries in Taiwan’s tech sector, bringing hardware makers into deeper collaboration with AI firms.
Still, Taiwan retains unique advantages: proximity to leading semiconductor foundries, decades of manufacturing know-how, and long-standing partnerships with the world’s largest technology companies. These strengths are helping the island reposition itself as a global hub for artificial intelligence infrastructure.
