According to a report from Economic Daily News, Southeast Asia has emerged as an investment hub for major cloud service providers (CSPs) worldwide. In response, Taiwanese server ODMs such as Foxconn, Quanta, Wiwynn, and Inventec are actively expanding their production capability in the region to meet the growing demand for AI servers from international CSPs and secure more orders by producing locally.

The report indicated that, for example, leading server ODM Foxconn has facilities in Taiwan, Vietnam, Thailand, Indonesia, and Malaysia. Taiwan and Vietnam serve as the two primary production bases for servers. Thailand mainly focuses on electric vehicle assembly, while Indonesia primarily manufactures electric vehicle components, and Malaysia mainly produces semiconductor-related products.

On the other hand, Ingrasys’s Taoyuan NanChing factory, a subsidiary of Foxconn, primarily produces AI servers, high-speed computing accelerators, and cloud storage products, according to the report citing industry sources. The Taoyuan NanChing factory has been recognized as the world’s first AI server lighthouse factory for leveraging AI to significantly enhance production efficiency, and NVIDIA GPU modules are produced automatically in the NanChing factory, as noted in the report.

As for Foxconn’s Vietnam factory, with the expansion of Foxconn Industrial Internet (Fii) in the local area, it has also become one of the major centers for server production, according to the report.

Another Taiwanese server ODM that has expanded its production in Southeast Asia is Quanta. The report noted that Quanta’s server factories are primarily located in Taiwan and Thailand. In August of this year, the company announced plans to invest 850 million baht (approximately USD 25 million) to expand its factory in Thailand, aiming to enhance server-related production capability in response to strong customer demand.

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(Photo credit: Foxconn)

Tesla, the electric vehicle giant, initially planned to establish a plant in Thailand, with an estimated investment exceeding USD 5 billion. However, according to a report from Thai media outlet The Nation, Tesla has decided to scrap the plans for the Thai plant after further evaluation, shifting its focus to expanding the local charging station network instead.

The report further cited sources, indicating that Tesla has re-evaluated its expansion plans in Asia and has decided to cancel all projects in the region. This includes not only the planned one in Thailand but also projects in Malaysia and Indonesia, leaving only the most economically viable production lines in China, the U.S., and Germany.

In September 2023, Thai Prime Minister Srettha Thavisin announced the successful attraction of Tesla to Thailand following a visit to the U.S. In November, Srettha met with Tesla executives and revealed that the company had begun site evaluation for a plant, with an investment exceeding USD 5 billion.

However, due to significant changes in the electric vehicle market impacting expected investment returns, Tesla has decided to postpone its global expansion plans.

Besides the aforementioned Asian locations, Tesla had also planned to build a plant in the Nuevo León industrial park in northeastern Mexico. However, Tesla reportedly confirmed in October 2023 that the plan is on hold due to economic concerns.

Thailand is reportedly the largest automotive producer in Southeast Asia. With the global trend shifting towards electric vehicles replacing traditional combustion engines, the Thai government is said to be promoting related policies to boost local EV production.

The goal, as per a report from Bloomberg, is expected to have electric vehicles make up 30% of the country’s total automotive production by 2030.

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(Photo credit: Tesla)