Hon Hai Precision Industry Co., Ltd., also known as Foxconn, has announced a substantial investment of $120 million through its Singapore subsidiary, Cloud Network Technology Singapore Pte. Ltd., into its Mexican operation, FII AMC MEXICO S. DE RL DE CV. This strategic move underscores the company’s ongoing commitment to bolstering its capabilities in the artificial intelligence (AI) server production realm.
This investment marks a significant milestone in Hon Hai’s expansion strategy within Mexico, following a $30 million investment earlier in February to enhance its manufacturing footprint. The funds are earmarked for the acquisition of land in El Salto, Jalisco, covering an expansive 421,600 square meters, setting the stage for an augmented production capacity.
Industry insiders have highlighted the initiative’s primary objective: to amplify AI server production lines. Fii Industrial, a subsidiary of Hon Hai, has established a formidable presence in the global manufacturing sector, with surface assembly technology (SMT) production lines already operational in the United States, Vietnam, and Taiwan. This network of production facilities allows Fii to meet the rising demand for high-end AI servers, positioning the company as a pivotal player in the global supply chain.
The investment spree includes significant allocations towards enhancing server assembly operations, with previous investments in Ingrasys Technology’s Mexican plant aimed at expanding server assembly business capabilities. Fii’s role as a dominant supplier to NVIDIA, a leading AI chip manufacturer, further cements its strategic importance, supplying over 50% of AI server chip substrates and securing exclusive orders for NVIDIA’s GH200 chip modules.
Additionally, the collaboration with NVIDIA at the GTC technology conference showcased innovative AI data center cooling solutions, underscoring the synergistic partnership between Hon Hai and NVIDIA. This collaboration is expected to position Hon Hai as a primary supplier for NVIDIA’s GB200 NVL72 server motherboards and switch boards, hinting at a substantial increase in server cabinet shipments by 2025.
With these strategic investments and partnerships, Hon Hai is poised to significantly enhance its global manufacturing capabilities in the AI server domain, aligning with the company’s long-term vision to lead in the technological innovation landscape while contributing to the development of AI infrastructure worldwide.
