Omdia projects Foxconn to become the world’s largest server vendor

Fueled by soaring demand for AI-optimized servers from major US cloud providers, Foxconn’s ODM direct business will achieve astronomical growth in 2024, securing the top spot in Omdia’s global server market analysis. Foxconn will overtake Dell, which claimed the lead from HPE in 2018, marking the first time a non-US company tops the server market rankings.

“The four largest cloud providers—Microsoft, Amazon, Google, and Meta—will comprise nearly half of 2024’s data center capex, amplifying their influence on the competitive server market,” said Vlad Galabov, Omdia Senior Director. “With AI application development and deployment dominating compute priorities, vendors aligning with NVIDIA are thriving. These dynamics have propelled Foxconn to the top spot.”

Foxconn isn’t the only vendor benefiting from the surge in demand for AI-optimized servers. Quanta Cloud Technologies (QCT), ZT Systems and Super Micro grew their server revenue more than 100% in 2024. Dell won big strategic clients like CoreWeave and xAI. It also developed a portfolio of professional services and reference designs, including AI consulting services. “Despite ranking shifts, all server vendors will see 2024 as a major success due to significant market growth,” said Manoj Sukumaran, Senior Principal Analyst at Omdia.”

The consolidated nature of investment made 2024 a unique year in the server market. Omdia projects 10 companies will make up nearly 60% of the global server investment; 10 companies will fulfil over 70% of market demand.

Omdia accounts only for direct-to-user sales by ODMs like Foxconn, Pegatron and Flex. Revenue from manufacturing servers for OEMs like Dell, HPE and Cisco is excluded to prevent double counting. ODMs are not credited for sales realized by OEMs.

“Foxconn has more growth ahead, having secured a close partnership with NVIDIA to manufacture Blackwell GPU reference designs. They will become the largest supplier of NVL36 and NVL72 racks to cloud service providers,” added Sukumaran.

2025 is set to be another strong year for the data center industry, particularly the server market, driven by the next phase of AI infrastructure deployment at both cloud service providers and enterprises. Omdia forecasts server capex to grow 22%, surpassing $280 billion next year. This robust growth is expected to continue throughout the decade with the server market expected to reach $380 billion by 2028, approaching half a trillion dollars by 2030.

“We’ve only seen the tip of the iceberg of AI-specialized cloud SP formation and spending. Their server capex is set to grow significantly, with CoreWeave potentially outspending Oracle in 2025,” said Galabov.

Highly regulated industries have shared with Omdia that 2024 won’t see the regulatory frameworks needed to scale AI production. Additionally, enterprise investment in 2024 was limited by GPU availability which will improve in 2025.