FOXCONN’S planned mega-artificial intelligence (AI) server plant near Guadalajara, Mexico, will complete construction in a year despite the threat of new tariffs from President Donald Trump, according to Jalisco Governor Pablo Lemus Navarro.
Hon Hai Precision Industry, Foxconn’s official name, is investing about US$900 million in what will become the world’s largest assembly plant for servers powered by Nvidia’s state-of-the-art GB200 AI chips, Lemus said.
The project consists of two phases: the expansion of an existing Foxconn facility in the municipality of El Salto, and the construction of a new plant nearby. Construction “should be finished in a year”, Lemus said, adding that the plant is expected to open late this year or early 2026.
Foxconn is currently in the process of obtaining permits from the municipal government of El Salto to start the construction of the new plant, said Cindy Blanco, Jalisco’s secretary of economic development. She also said the state government will provide fiscal incentives to support the project, and that her office will be “as supportive as possible with all the paperwork, whatever they may need, in the process of opening their plant here in the state”.
A representative of Hon Hai declined to comment.
Foxconn began growing its server-related business in Mexico during the first Trump administration as a hedge against US-China tensions. While Trump’s proposed 25 per cent tariffs on Mexico could risk increasing the cost of doing business in the country for Foxconn and others, Lemus said that new investment in the state was on the rise and likely to increase in 2025 compared to 2024.
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“What various plants have told us is that regardless of what happens with the tariffs announced by President Trump, they will continue working in Mexico,” Lemus said. “Not only have we not seen investments slow down, on the contrary, they continue to arrive in Jalisco.”
As much as US$300 million is being invested this year in industrial parks across Jalisco, with demand surging. Up to 60 per cent of the more than 600,000 square metres of available industrial space is already pre-leased, Lemus said.
Jalisco is home to some 70 per cent of companies in Mexico’s semiconductor industry. In addition to the Foxconn plant, ASE Technology Holding’s ISE Labs announced in November that it had acquired land in the municipality of Tonalá for a new semiconductor packaging and testing facility. Also last year, Micron Technology said that it will establish a new engineering and operations centre in Guadalajara. And Mexico President Claudia Sheinbaum’s “Kutsari” initiative – aimed at growing the country’s semiconductor industry – includes plans for a new design centre in Jalisco.
China’s top electric vehicle maker BYD had previously considered Jalisco for a new plant, though the company indicated in September it would pause its plans amid US political uncertainty. BYD has not recently been in contact with the state’s officials and the status of the project remains unclear, according to Blanco.
Lemus said that Jalisco would “welcome all investments”, including from China. “We cannot limit the arrival of investments from any country.” BLOOMBERG
