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The electronics company Foxconn is constructing the world's largest factory in Mexico to provide Nvidia's most advanced artificial intelligence servers. This is a transparent example of how global technology supply chains are decoupling from China.
The factory within the central Mexican city of Guadalajara will assemble GB200 Blackwell AI servers, Foxconn Chairman Young Liu told customers and partners at Foxconn's annual technology showcase event in Taipei.
There is “crazy” demand for the Blackwell platform, Liu said on the event, which was also attended by Nvidia's vp Deepu Talla, who revealed few details of the 450-meter-long facility.
Western governments and corporations have been trying for several years to maneuver manufacturing of sensitive technology products and significant supplies closer to their very own territory to cut back their dependence on China amid growing geopolitical tensions and provide chain disruptions.
Washington's efforts to rebuild domestic semiconductor manufacturing with billions of dollars in subsidies have sparked major investments from corporations similar to Taiwan Semiconductor Manufacturing Co, the world's largest chipmaker, and its rivals Intel and Samsung.
Foxconn itself continues to operate several huge factory complexes in China, including the world's largest iPhone factory.
The Taiwanese group is the world's largest contract electronics manufacturer, providing design, component manufacturing and assembly services for products starting from smartphones to industrial robots and electric vehicles.
While Liu said China's share of the group's global manufacturing footprint would fall to simply over 70 percent, that transition has been slow as the corporate has long struggled to expand low-cost, labor-intensive smartphone assembly operations in Southeast Asia elsewhere.
Just last yr, Foxconn accelerated its investment pace in India, particularly for iPhone production.
The shift within the production of servers and related components has happened much faster as they’re a part of the critical infrastructure in data centers for major cloud corporations similar to Google and Amazon, in addition to governments.
Driven by demand from major cloud service providers and a trade war unleashed by then-US President Donald Trump, Foxconn and other major electronics contract manufacturers began moving server production out of China several years ago.
Liu predicted that the rise of “sovereign AI” – the necessity for nations to develop their very own artificial intelligence to align with their national security interests – would also result in increasingly localized production of the servers they need.
In addition to sovereign AI, “I might suggest a 'sovereignty server' concept,” he said. “Future server production will occur in countries where it’s required. That’s the direction we’re seeing now.”
