Hon Hai Precision Industry Co., the world’s largest contract electronics manufacturer, better known as Foxconn Technology, is looking to expand its server production capacity in Mexico to meet “crazy” demand for next-generation Blackwell GPUs and Nvidia servers, reports Bloomberg. The company’s move indicates a powerful belief that AI-related investments will continue to grow.
Young Liu, CEO of Foxconn, told Bloomberg Television that demand for NVL72 servers with GB200 and 72 B200 GPUs to run AI and HPC workloads has exceeded initial expectations and has been “crazy.” To this end, Foxconn is building one of the world’s largest server assembly factories in Mexico, which will produce machines for companies in North America without using production capacity in China, Taiwan or Southeast Asia. According to the Taiwanese company, it has already invested over $500 million in its Mexican operations in Chihuahua South China Morning Fasting.
Building a “huge” facility in Mexico (outside China, Taiwan, India, Malaysia and Vietnam, where the company currently operates) is primarily a strategic move for Foxconn. On the one hand, the company is reducing its dependence on China (although the largest plants where it produces iPhones remain in Tianxia). On the other hand, it is expanding its presence in North America, allowing it to build machines for the U.S. government and other customers who prefer not to apply systems built in China.
When operational in 2025, the plant is expected to become the world’s largest motherboard and server assembly facility for Nvidia Blackwell processor-based servers. The planned capacity of the plant is 20,000 servers, presumably per month, which means 240,000 machines per year. Because B200-based Nvidia machines require liquid cooling, their assembly is more intricate than that of classic servers, which is why both Foxconn and Supercmicro have invented data center-scale liquid cooling solutions.
Foxconn is reportedly the sole manufacturer of Nvidia’s compute graphics modules such as the A100, H100, and H200. It is also a significant manufacturer of HGX boards used by Nvidia and its server assembly partners. The company also produces AI server boards for other companies, including Amazon Web Services and Google, two vast cloud service providers (CSPs) that develop their own AI processors. With the additional bandwidth in Mexico, Foxconn will capture an even larger share of the AI server market.
Foxconn’s CEO admitted that there were production disruptions that affected servers based on Nvidia B200 technology. Originally scheduled for release in early Q4, shipments are now delayed to later in the quarter due to the need to redesign the packaging of the B100 and B200 processors.
Young Liu addressed market concerns about potential saturation of AI computing needs, stating that current demand trends have exceeded Foxcoon’s initial forecasts. This suggests that AI growth expectations remain solid and show no signs of slowing down any time soon.
Foxconn has been operating in Mexico for many years. The company has plants in San Jerónimo, Chihuahua, where it assembles computers. Juárez has two more plants: formerly owned by Motorola, which now produces mobile phones, and a second set-top box plant acquired from Cisco Systems. Additionally, in Tijuana, Foxconn produces LCD TVs in a plant that was once owned by Sony.
