(Bloomberg) — Key NVIDIA Corp. partner Quanta Cloud Technologies expects to double sales of its artificial intelligence servers by 2024 and continue to grow even longer as businesses weave AI into their operations and services.
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The AI boom “will certainly see its growth get stronger and stronger for years to come,” Mike Yang, president of QCT, a wholly owned subsidiary of Taiwan’s Quanta Computer Inc., told Bloomberg Television in an interview.
Quanta Computer, which works with Nvidia to build AI servers, has benefited from Wall Street’s bet on the technology as the next big thing. According to the Santa Clara, California-based chip manufacturing partner, AI accelerators are a must-have hardware this year, and Quanta’s stock price has more than doubled by 2023.
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Various component suppliers are working together to increase production capacity and address an ongoing shortage of NVIDIA’s cutting-edge AI chips, Yang said, without making a commitment to meet customer demand until next year. Analysts said this month that Nvidia executives are confident it will expand supply to meet high demand.
“We have a very limited supply, but next year I think NVIDIA will solve everything,” Yang said.
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QCT generates billions of dollars in revenue each year, with AI servers accounting for 65 percent of its total sales, Yang said. AI separates servers from traditional processor-driven hardware, which includes graphics processors such as those made by Nvidia and Intel Corp., which still dominates.
Alphabet Inc.’s Google Cloud, Amazon.com Inc.’s AWS and Alibaba Group Holding Ltd. They are among QCT’s biggest customers. The company competes with Shanghai-listed Foxconn Industrial Internet Co and Taiwanese counterpart Wiwin Corp to supply servers to cloud service providers, mainly in the US and China.
According to Taipei-based TrendForce, global shipments of AI servers are expected to grow at a compounded annual rate of 29% between 2022 and 2026. Analysts and researchers’ estimates have proven overly conservative this year, as Nvidia has surprised the market with sales forecasts in consecutive quarters.
Yang enjoyed the limelight when NVIDIA CEO Jensen Huang visited QCT’s booth at the Taipei Technology Expo in late May. Huang offered Yang his signature leather jacket to wear during their joint marketing event. According to Yang, the two companies started working together to produce server products in 2015.
Like many other manufacturers, Yang is keeping a close eye on the US-China trade conflict. The executive said QCT is looking to expand its product lines in the U.S., Germany and Thailand while maintaining its capabilities in China, although companies cannot afford to miss out on China as a major market.
“I still believe that China is the biggest market,” Yang said. “I believe people still focus on both. China and the rest of the world.
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