[News] Taiwanese Server ODMs Seek Production Capabilities Outside Mexico Amid Trump’s Tariff Threat

According to a report from UDN News, U.S. President-elect Donald Trump’s proposed 25% tariff on imports from Mexico has sent shockwaves through the server manufacturing industry. The report highlights that Taiwanese server ODMs are swiftly implementing contingency measures, with major players like Foxconn and Quanta increasing their investments in the U.S. Meanwhile, manufacturers such as Wistron, Wiwynn, and Inventec are actively preparing similar strategic responses.

The report, citing industry sources, reveals that Trump’s tariff proposal has led global cloud service providers (CSPs) and server brands to demand alternative production plans from Taiwanese manufacturers. These alternatives emphasize capabilities outside of Mexico, with a preference for “Made in the USA” options. This urgency has driven manufacturers to activate their “Plan B” strategies, intensifying investments in U.S. operations.

Previously, many leading manufacturers had established facilities in Mexico to efficiently serve North American clients. However, the report notes that Trump’s tariff proposal has placed AI server manufacturers on high alert, as Mexico is currently the largest exporter of servers to the U.S. If the tariffs are implemented, the AI server supply chain would face significant disruption.

Foxconn: New Factory Plan in the U.S.

According to the report, Foxconn, a leading player in the AI server manufacturing sector, has responded swiftly by approving a new factory plan in the U.S. The company is set to invest USD 33.03 million to acquire land and facilities in Houston, Texas, to manufacture AI servers.

Foxconn is carefully monitoring potential changes in U.S. trade policy under Trump to assess the need for further expansion in the U.S. The report cites Foxconn Chairman Young Liu, who stated that while clients might need to relocate production, Foxconn’s globally advanced and flexible layout positions the company to handle such shifts more effectively than its competitors.

Quanta: Expanding Operations Across the U.S.

As for Quanta’s accelerated efforts to expand in the U.S., the report notes that the company’s board has approved an additional USD 230 million investment in its Tennessee subsidiary, QMN, bringing Quanta’s total U.S. investment this year to USD 1.23 billion.

Quanta’s Executive Vice President Mike Yang disclosed that the company has production facilities on both the East and West Coasts of the U.S., ranging from L6 (motherboard assembly) to L10 (server assembly and testing), as the report indicates. This diversified capacity allows Quanta to address the varying needs of its customers across regions, and the report notes that the company intends to maintain its focus on U.S. investments.

Wiwynn and Inventec: Flexible Contingency Plans

Meanwhile, Wiwynn and Inventec are closely monitoring policy developments while maintaining close communication with clients and preparing flexible contingency measures. The report cites Inventec’s General Manager, Jack Tsai, who highlighted that the company operates facilities in various global locations. If the U.S. imposes high tariffs on Mexican imports, Inventec is prepared to shift production to its factories in Thailand or Taiwan, according to the report.

Read more

• [News] Trump’s Tariffs Likely to Hit Taiwan’s AI Server Supply Chain, with Foxconn among the Impacted
• [News] Taiwanese AI Supply Chain Expands in Southeast Asia Amid Investments from CSPs

(Photo credit: Foxconn)