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Apple is asking Foxconn and Lenovo to build AI servers for it on Silicon chips - but in Taiwan

Apple is asking Foxconn and Lenovo to build AI servers for it on Silicon chips - but in Taiwan
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Apple intends to utilize its Apple Silicon processors in its own artificial intelligence servers. The company has requested Foxconn and Lenovo to assemble them in Taiwan.

The servers will be employed, among other things, to support the Apple Intelligence service. Apple has approached Foxconn and Lenovo to create the machines and specifically requested that the servers be manufactured in Taiwan. One reason may be to distance itself from China, while another is to leverage Foxconn's engineering resources, which have been involved in building AI servers based on NVIDIA.

Foxconn, Apple's primary manufacturing partner, is also the world's largest producer of artificial intelligence servers, primarily based on NVIDIA H100 and H200. However, Foxconn's capabilities in Taiwan are quite limited as the company prepares to begin mass production of machines based on the GB200 architecture with Blackwell.

“One reason Apple wants Foxconn to produce servers in Taiwan is that it hopes to attract engineering talent and research resources working on NVIDIA projects,” an insider noted to Nikkei.

Apple's approach to artificial intelligence differs from that of cloud service providers such as Microsoft and Amazon. It focuses more on AI outputs rather than training large-scale language models. Therefore, Apple will not need servers with advanced technologies like liquid cooling.

Since Apple's AI servers are intended for internal use, the scale of production will be relatively small compared to NVIDIA's GB200. This also poses a challenge, as companies like Foxconn and Lenovo prefer clients with larger orders. However, the deployment of Apple Intelligence for a broader user base raises hopes for larger orders.

Apple is lagging behind NVIDIA in data center server design, so it is seeking support from suppliers for engineering and design services. On the other hand, Apple's servers are not as complex, which should expedite the development and validation process.

Due to Foxconn's limited capacity in Taiwan, Apple is also negotiating with Lenovo and its subsidiary LCFC for assistance in development. To diversify and reduce dependency on Chinese suppliers, Apple and Lenovo are discussing additional manufacturing capacities outside of China. Smaller suppliers, such as Universal Scientific Industrial, are also being considered for production support.

Sources: Nikkei, Tom's Hardware

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