US tech giants turn to Mexico to make AI gear, spurning China
Some of the biggest U.S. companies in artificial intelligence have asked their Taiwanese manufacturing partners to step up production of AI-related hardware in Mexico, seeking to diminish reliance on China. Taiwan-based Foxconn, the world’s largest contract electronics manufacturer, and other Taiwanese companies are heeding the call and investing more in Mexico, according to industry executives and analysts.
They are taking advantage of the U.S.-Mexico-Canada Agreement, the free-trade deal that took effect in 2020. It has attracted billions of dollars from manufacturers aiming to move operations from China to Mexico, a process known as nearshoring. The North American nations “hope to replace products imported from Asia as much as possible," said James Huang, chairman of the Taiwan External Trade Development Council.
“Based on this consensus, Mexico is poised to become the most important manufacturing base for the USMCA." In February, Foxconn said it spent about $27 million to acquire land in western Mexico’s Jalisco state, in what people familiar with the plan described as a major expansion of the company’s AI server production. Foxconn said it had invested about $690 million in Mexico over the past four years. Foxconn’s Mexico facilities manufacture AI servers for U.S.
giants such as Amazon.com, Google, Microsoft and Nvidia, said people familiar with the operations. The U.S. companies either declined to confirm whether they have servers made in Mexico by Foxconn or didn’t respond to requests for comment.
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