Foxconn builds the world's largest factory in Guadalajara for manufacturing Nvidia's most advanced AI servers, a clear indication of the "nearshoring" strategy of global technology supply chains increasingly decoupling from China. The facility, which will be over 450 meters long, is set to assemble the GB200 Blackwell AI servers, as Foxconn Chairman Young Liu announced at the company's annual technology presentation in Taipei.

The decision to move production to Mexico highlights the ongoing trend of bringing sensitive technology products and critical supply chains closer to Western markets. This occurs against a backdrop of growing geopolitical tensions and recurring supply chain disruptions. "The demand for the Blackwell platform is insanely high," emphasized Liu, who was present along with Nvidia Vice President Deepu Talla.

The US government has been making efforts for years to strengthen the production of semiconductors and other key technologies domestically. Through multi-billion dollar subsidies, significant investments have been triggered by companies like Taiwan Semiconductor Manufacturing Co, Intel, and Samsung. Foxconn, the world's largest electronics contract manufacturer, is further expanding its global presence while still operating several massive factories in China, including the world's largest iPhone factory.

The Taiwanese corporation plans to reduce China's share of the global production network to just over 70 percent. However, this transition is sluggish, as Foxconn has faced difficulties in scaling low-cost, labor-intensive assembly work in Southeast Asia and other regions. It was only last year that Foxconn accelerated its investments in India, mainly for iPhone production.

In contrast, the relocation of server production is proceeding significantly faster, as it is part of the critical infrastructure of data centers for large cloud providers like Google and Amazon, as well as governments. The shift was also accelerated by the trade wars under former U.S. President Donald Trump, which prompted many electronics contract manufacturers to move server production out of China.

Young Liu predicted that the growing importance of "sovereign AI"—the endeavor of nations to develop their own artificial intelligence to uphold national security interests—will further localize server production. "I propose the concept of a 'sovereignty server.' Future server production will occur in the countries that need them. That is the direction we are currently observing," he explained.

Despite these positive developments, Foxconn remains a key player in the global electronics market, continuously adjusting its strategic orientation to meet dynamic demands. The new factory in Guadalajara is a milestone in this strategy and demonstrates how companies are realigning their supply chains to become more resilient against global uncertainties.