00:00Foxconn's best known for assembling Apple iPhones and now is a major producer of AI servers.
00:07But here in the city of Kaohsiung in southern Taiwan,
00:10a different bed of Chairman Yang Liu is taking shape.
00:13His goal is to transform the tech giant from traditional manufacturer
00:17into a leader in new, higher-margin activities.
00:20EVs, digital health and robotics are at the core,
00:24all of which require power packs which Foxconn wants to mass-produce.
00:28Troy Wu heads up a team tasked with achieving that goal.
00:32In the future, we believe the scale of the battery will not be smaller than the semiconductor itself.
00:42But the company faces a tough path ahead, even with production of EV cells already underway.
00:48First is materials, with many Foxconn suppliers relying upon China,
00:53which has been flexing its grip over rare earths.
00:56Then there's competition, not just from across the Taiwan Strait,
01:00but also battery heavyweights in Japan and Korea, plus building out distribution channels.
01:06So far, Foxconn has just three buyers for its vehicle product,
01:10though it's planning to increase output in 2026.
01:14Still, that's not a deterrent for the company, which sees a big opportunity in AI in particular.
01:20It already counts hyperscalers like Amazon, Microsoft and Alphabet among its biggest customers, plus Nvidia.
01:27Now Foxconn's working on energy storage cells that could become key to managing the huge power demands of AI servers.
01:34For long-term consideration, stable power supply for the AI data center is very important for the AI data center operation.
01:48So battery can play a very important role.
01:52There are links to other parts of Foxconn's business.
01:54Currently, Foxconn already takes around 40% server market, manufacturing market.
02:06their customer always requests the better, safer battery technology and better efficiency.
02:20So battery technology for servers.
02:24So now currently we work with our BG or subsidies who work with the server client.
02:38Foxconn's chairman is optimistic about the business heading into next year
02:42and says AI will be the biggest driver.
02:45It's too early for batteries to contribute any meaningful revenue,
02:49but they are part of the long-term vision.
02:51In Taiwan, Annabelle Drewlers, Bloomberg News.
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