Company Coverage
Foxconn Industrial Internet (601138 CH): Post-Results Call: Vera Rubin On Track; Visibility Now Extends Into 2027
BUY (Maintained)
Current price:
Target price:
Upside:
Rmb60.15
Rmb89.50
+48.79%
Analyst
Analyst
Highlights
- Vera Rubin enters pre-production preparation in 3Q26 with first shipments in 4Q26, becoming the mainstay platform through 2027, while GB300 bridges the transition and AI server order visibility now extends into 2027.
- Supply constraints have widened to include substrates and wafers alongside CoWoS but have not yet affected shipments, while the ASIC mix continues to rise and NeoCloud is emerging as a second demand pool. Maintain BUY. Target price: Rmb89.50.
Analysis
- Vera Rubin ramp reiterated, content value per rack expanding. The known production ramp timeline for Vera Rubin remains unchanged at “preproduction preparation in 3Q26, first shipments in 4Q26 and ramp through coming quarters to be the key product line for 2027” Management also stated that the complex rack level design, higher requirement for liquid cooling, power supply, system integration and testing are bolstering Foxconn Industrial Internet’s (FII) dollar content per rack, and this is expected to further accelerate content growth going forward as AIDC racks become more complex in the next few years.
- Supply constraints have widened but are still not binding. Beyond chip supply and CoWoS capacity, management named substrates and wafers as constrained for the next-generation rack. It has not yet observed component tightness materially affecting shipments, citing strong AI demand and firm customer data centre build plans, and expects the constraints to ease progressively as capacity expands.
- AI server order visibility now extends into 2027. Management sees visibility extending well into 2027 with orders constantly increasing, with both
training and inferencing workloads as major drivers. They highlighted that top global CSP capex is expected to exceed US$900b in 2026, with all top CSPs signalling further expansion in 2027 in recent results briefing despite a peaklevel capex spend in 2026.
- NeoCloud is emerging as a new growth driver. Management flagged the rapid expansion of NeoClouds such as CoreWeave and Lambda, citing CoreWeave's US$66.8b backlog, and pointed to Synergy Research's forecast of a NeoCloud market approaching US$400b by 2030 at a 58% CAGR. FII is targeting NeoCloud and sovereign cloud as new customer groups and notes that the AI investment trend has expanded from being more US-specific to becoming global in scale.
Highlights
- Vera Rubin enters pre-production preparation in 3Q26 with first shipments in 4Q26, becoming the mainstay platform through 2027, while GB300 bridges the transition and AI server order visibility now extends into 2027.
- Supply constraints have widened to include substrates and wafers alongside CoWoS but have not yet affected shipments, while the ASIC mix continues to rise and NeoCloud is emerging as a second demand pool. Maintain BUY. Target price: Rmb89.50.
Analysis
- Vera Rubin ramp reiterated, content value per rack expanding. The known production ramp timeline for Vera Rubin remains unchanged at “preproduction preparation in 3Q26, first shipments in 4Q26 and ramp through coming quarters to be the key product line for 2027” Management also stated that the complex rack level design, higher requirement for liquid cooling, power supply, system integration and testing are bolstering Foxconn Industrial Internet’s (FII) dollar content per rack, and this is expected to further accelerate content growth going forward as AIDC racks become more complex in the next few years.
- Supply constraints have widened but are still not binding. Beyond chip supply and CoWoS capacity, management named substrates and wafers as constrained for the next-generation rack. It has not yet observed component tightness materially affecting shipments, citing strong AI demand and firm customer data centre build plans, and expects the constraints to ease progressively as capacity expands.
- AI server order visibility now extends into 2027. Management sees visibility extending well into 2027 with orders constantly increasing, with both
training and inferencing workloads as major drivers. They highlighted that top global CSP capex is expected to exceed US$900b in 2026, with all top CSPs signalling further expansion in 2027 in recent results briefing despite a peaklevel capex spend in 2026.
- NeoCloud is emerging as a new growth driver. Management flagged the rapid expansion of NeoClouds such as CoreWeave and Lambda, citing CoreWeave's US$66.8b backlog, and pointed to Synergy Research's forecast of a NeoCloud market approaching US$400b by 2030 at a 58% CAGR. FII is targeting NeoCloud and sovereign cloud as new customer groups and notes that the AI investment trend has expanded from being more US-specific to becoming global in scale.
BUY (Maintained)
Current price:
Target price:
Upside:
Rmb60.15
Rmb89.50
+48.79%
Analyst
Analyst
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