Taiwanese Foxconn Driven Towards Mexico Due To Demand For EV, Sophisticated Chips And Geopolitical Tensions

Taiwanese tech suppliers ramped up production capacity in Mexico to tap North America's growing demand for electric vehicles and servers.
Key Apple Inc AAPL iPhone assembler Hon Hai Precision Industry Co Ltd HNHPF Foxconn and others aimed to help the U.S. and their clients shift their supply chain from East to West, Nikkei Asia reports.
Leading contract electronics manufacturer Foxconn recently established a headquarters in Mexico.
Foxconn, which also counts Alphabet Inc GOOG GOOGL Google, and Amazon.Com Inc's AMZN AWS as clients, prioritized electric vehicles amid the slowing smartphone market.
Foxconn reportedly secured new EV clients in Mexico. It will have three local manufacturing options for EV clients in North America: Ohio, Wisconsin, and Mexico.
iPhone assembler Pegatron Corp PGTRF, MacBook maker Quanta Computer, iPad supplier Compal Electronics and Inventec, a notebook manufacturer for HP Inc HPQ and Dell Technologies Inc DELL, look to grow their manufacturing presence in Mexico this year.
Tesla Inc TSLA and General Motors Co GM supplier Pegatron earmarked $300 million - $350 million in capital expenditures this year for Mexico and Southeast Asia.
Compal looked to grow capacity at the Mexico facility for its automotive electronics business.
Quanta hired more engineers with expertise in automotive electronics computing systems in Mexico.
Chiu Shih-fang, a supply chain analyst with the Taiwan Institute of Economic Research, said, "The U.S. policy is really the driving force behind this shift, which will be led by the local production demand for EVs as well as servers."
The U.S. emphasized domestic production of cutting-edge semiconductor chips following growing geopolitical tensions with China, further aggravated by the Communist country's role in disrupting the global semiconductor supply chain due to the pandemic.

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