US tech giants shift AI hardware manufacturing to Mexico over 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.” Wall Street Journal