Vietnam becomes a core hub in Foxconn AI buildout
Foxconn Industrial Internet, the server and network focused arm of Hon Hai, has set an ambitious plan for Vietnam. The company is targeting Vietnam revenue of 20 billion dollars in 2026, roughly double the level it expects for 2025, as global buyers race to secure the hardware that runs artificial intelligence. The target reflects a surge of orders for systems built around Nvidia accelerators, along with other high performance parts that cloud companies rely on to train and run large models. Vietnam is set to handle a larger share of these builds as Foxconn shifts capacity to meet this wave of demand.
The pivot lines up with a wider change inside the group. Revenue from cloud and networking products moved ahead of consumer electronics in the second quarter of 2025, a reversal from the smartphone era when handheld devices dominated sales. In that quarter, cloud and networking accounted for about 41 percent of company revenue while consumer electronics contributed about 35 percent. The mix reflects a new center of gravity for Foxconn as servers, storage, and data center gear grow faster than phones and PCs.
In Vietnam, Foxconn Industrial Internet plans to expand assembly and integration for complete AI servers and racks, the cabinets of compute, networking, and power systems that end up in data centers. Buyers include the largest public cloud providers, plus social media platforms and AI labs that are building clusters at an unprecedented scale. The company already manufactures a spectrum of server parts across Asia and the Americas. Vietnam is becoming the place where those parts come together at speed for export to regional and global customers.
A 20 billion dollar goal would place Vietnam among the group’s top production bases by value. It also underscores how central Nvidia based systems have become to Foxconn’s pipeline. Recent generations of Nvidia platform designs, including HGX and the new GB200 platform, require custom boards, liquid cooling options, and dense rack layouts. Integrators that can source components, build to spec, validate performance, and ship quickly are capturing a rising share of the value in the AI stack. Foxconn wants Vietnam at the center of that work.
What FII plans to build in Vietnam
AI servers are not single boxes. They are engineered systems built from accelerator cards, CPUs, memory, storage, high speed networking, and precision power delivery. Many deployments arrive as fully assembled racks that slot directly into a data hall. Foxconn Industrial Internet specializes in this type of work, including motherboard and baseboard design, server assembly, firmware loading, thermal and signal testing, and final rack integration. Vietnam operations are expected to handle more of those stages as orders climb in 2026.
From boards to full racks
In a typical workflow, suppliers ship accelerators and CPUs to Foxconn sites, where engineers mount them on carrier boards and motherboards, wire up high bandwidth links, and add liquid or advanced air cooling. The build then moves to system integration for burn in, validation against customer software stacks, and rack level testing. The result is a ready to deploy cabinet that reduces on site labor for the buyer and shortens time to service. Moving a larger slice of this process to Vietnam lets Foxconn keep costs down while staying near key component flows from across Asia.
Why demand is surging
Training a modern generative model requires thousands of accelerators working together, plus power, cooling, and ultra fast networking. Even after training, inference at scale demands fresh clusters to serve millions of users. That is why cloud providers are ordering complete racks in bulk. Each new generation of Nvidia platform tends to raise the power density and network complexity, which favors experienced integrators. Vietnam’s role grows as Foxconn scales to ship more complete systems in predictable windows aligned with customer build schedules.
Why Vietnam matters for the AI supply chain
Vietnam sits close to the core Asian electronics supply base, yet it offers a different policy and cost profile than China. For a company that needs to move large volumes of sensitive hardware into North America, Europe, and partners in Asia, that combination matters. Vietnam has deep experience with assembly of phones, PCs, and networking gear. It has built clusters of suppliers that make enclosures, cables, power supplies, and test fixtures. Those inputs are now being redirected toward higher value server work.
Capacity, power, and logistics
AI hardware depends on dependable power and reliable logistics. Vietnam has added industrial zones, highways, and port access in the north and the south to support exporters. Investment has flowed into substations and grid upgrades that serve large campuses. For Foxconn, a network of facilities across Asia, the United States, and Mexico reduces bottlenecks. Vietnam can handle complex system work, while other sites can manage surge demand or specialized tasks. That balance improves delivery confidence for customers planning multi year data center rollouts.
How the AI server market is reshaping Foxconn
The company built its name on consumer devices, yet the center of growth now sits in servers and networking. The rise of AI clusters pulled forward demand for high value compute racks, and the numbers reflect the change. Quarterly sales in mid 2025 rose in line with expectations on the back of strong AI server orders, and guidance pointed to continued growth into the second half of the year. The share of revenue from cloud and networking moved ahead of smartphones for the first time in recent memory, a change that continued into subsequent quarters.
Foxconn also launched investments across the Americas to reinforce that shift. It added capacity in the United States and Mexico so that more server builds can ship within the region where they will be used. Mexico became a larger production base for server hardware after a series of investment moves in 2024 and 2025. Those sites complement work in Asia and give large buyers shorter supply routes, which lowers risk when logistics or trade policy becomes unpredictable.
Inside Foxconn Industrial Internet, the server mix has tilted toward AI. Company updates in late 2024 indicated that AI server revenue had reached nearly half of total server revenue. That share has likely grown as orders for newer Nvidia platforms accelerated through 2025. Vietnam’s expanded role aims to capture that momentum in 2026, when more of the build plan is expected to be in steady production.
Competition and customers
Taiwan based manufacturers dominate the global server market. Industry estimates show that Taiwan suppliers ship a large majority of the world’s servers and an even higher share of AI servers. Foxconn competes and partners within that ecosystem, alongside firms like Quanta and Wistron that also build for the biggest cloud companies. Relationships with chip makers matter. Foxconn has worked with Nvidia for years on graphics and server reference designs, then moved into large scale integration for data centers as AI workloads grew.
On the customer side, demand comes from a handful of very large buyers. Public cloud platforms, social networks, and AI labs account for most of the orders for the latest accelerator racks. These customers expect rapid ramps, consistent quality, and strict security in the supply chain. A multi country manufacturing network gives Foxconn flexibility to meet those timelines. Vietnam’s role is to combine cost efficiency with scale so that the company can ship complete builds in high volumes when new model training cycles begin.
Risks to the target
A 20 billion dollar Vietnam plan assumes stable supply of accelerators, networking chips, optics, power components, and memory. Shortages or delayed launches of next generation parts could push deliveries into later quarters. Trade and tariff policy can shift with little notice and may affect routing or pricing even when goods are not made in China. Export controls on advanced chips also force companies to plan different build lists for different destinations. Currency moves and power costs can change the math on where to assemble final systems.
Operational execution is another factor. AI racks have weight, thermal limits, and strict test procedures. Moving more of that work to new or expanded lines in Vietnam requires training, vendor qualification, and tighter coordination with logistics partners. The company has experience rolling out new lines across regions, yet scale ramps always carry risks. Clear communication with customers on delivery windows will be essential in 2026.
What it means for Vietnam
A larger slice of the server value chain in Vietnam would bring higher skill jobs in electrical engineering, software validation, and thermal management. It would also deepen local supplier capabilities in precision metal, cable assemblies, and power systems. As the country moves up the value curve, domestic firms can partner on non silicon parts and test services. Universities and technical institutes can align curricula with the needs of data center hardware, from signal integrity to factory automation.
There is a broader impact as well. AI compute clusters have long supply lines that include packaging, logistics, and after sales support. Service companies in Vietnam, from freight forwarders to maintenance specialists, can tap into that work. If Foxconn’s 2026 plan lands, it would place Vietnam higher on the map for next generation compute, opening the door for more investments in data center infrastructure and supporting industries.
Key Points
- Foxconn Industrial Internet targets 20 billion dollars of Vietnam revenue in 2026, about double its 2025 level.
- Orders for Nvidia based systems and other AI server products drive the plan.
- Cloud and networking revenue has moved ahead of consumer electronics at the group level.
- Vietnam will take on more assembly, validation, and full rack integration for export.
- Foxconn is adding AI server capacity in the United States and Mexico to complement Vietnam output.
- Taiwan vendors ship most global servers, with a very high share of AI servers, and Foxconn is among the leaders.
- Key risks include component supply, policy changes, logistics, and execution during scale ramps.
- If the plan succeeds, Vietnam moves farther up the value chain with higher skill jobs and deeper supplier networks.
