[News] Taiwan’s AI Server Manufacturers Target Texas for U.S. Expansion Amid Tariff Concerns

According to a report from UDN News, Taiwan’s contract manufacturers are gearing up to invest in the U.S. amid escalating tariffs under Trump’s administration. The report, citing Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA) Chairman Richard Lee, notes that Taiwan’s leading AI server contract manufacturers recently visited Texas and plan to announce increased investments in the U.S. before May 10, which marks Trump’s 100th day in office.

As Lee explained, Taiwanese manufacturers had previously invested in Texas but later shifted operations to Mexico due to cost considerations by clients. However, recent assessments indicate that investing in Mexico does not provide long-term benefits for Taiwan-U.S.-Mexico trade relations. As a result, since 2024, preparations have been underway for investment in Texas, focusing on AI server manufacturing, as cited in the report.

Citing industry sources, the report underscores that land and factory acquisition costs in Texas might start at a minimum of USD 2 billion. If new server assembly plants are constructed and equipped with automation systems, the initial investment per factory is estimated to range between USD 3 billion and USD 5 billion.

Taiwan’s Global Server Dominance and Potential Production Shift

The report further emphasizes that Taiwan’s ODM server manufacturers currently account for over 90% of the world’s server motherboard production and over 80% of total server system production. However, less than 15% of this production takes place in North America, meaning 85% is manufactured outside the U.S. The implementation of Trump’s policies could accelerate the shift of production sites, as the report highlights.

The report also mentions that Trump’s “Stargate” initiative has already begun construction of its first AI data center in Texas.

Taiwanese Manufacturers’ Responses and Future U.S. Expansion Plans

When asked about their U.S. expansion plans, Foxconn and Pegatron declined to comment, as indicated by the report.

According to another report from UDN News in late 2024, Foxconn is set to invest USD 33.03 million to acquire land and facilities in Houston, Texas, for AI server manufacturing. Furthermore, as noted in a report from Commercial Times, the company announced in mid-January 2025 that it would invest USD 128 million to purchase land and facilities in California to expand its AI server production capacity.

Meanwhile, Quanta stated that it already has manufacturing capacity in California and Tennessee and may expand those facilities as needed.

Wistron, which acquired land and factory space in Texas in 2024, has addressed its U.S. expansion plans, with Chairman Simon Lin recently stating that its production capacity in the U.S. will be sufficient to meet future demand, as the report notes.

Additionally, as mentioned in the report, Wiwynn stated that it is considering various capacity adjustments, including diversifying production sites to mitigate potential risks.

Read more

• [News] Foxconn and Taiwanese Manufacturers Boost U.S. Expansion Amid Potential Trump Tariff Hikes
• [News] Trump’s Tariffs Likely to Hit Taiwan’s AI Server Supply Chain, with Foxconn among the Impacted

(Photo credit: Wistron)