Cooperation between the United States and Taiwan is shifting production bases to cope with escalating tensions between the United States and China. American AI giants are urging their manufacturing partners in Taiwan to increase efforts in producing AI hardware in Mexico, reducing dependence on China.

In response, companies like Hon Hai Precision of Taiwan are actively planning to increase investment in Mexico.

These companies are leveraging the advantages of the United States-Mexico-Canada Agreement (USMCA) which came into effect in 2020, attracting more manufacturing investments from China to Mexico. Mexico is poised to become one of the most significant manufacturing bases in the USMCA region.

Reportedly, Hon Hai Precision has already purchased land worth approximately $27 million in the western state of Jalisco, Mexico, to expand the production of AI servers. Over the past four years, Hon Hai's investments in Mexico have amounted to approximately $690 million.

The continued growth of Taiwanese companies in Mexico is expected to significantly alter Mexico's industrial structure in the next decade. Commissioned by American companies, companies such as Amazon, Google, Microsoft, and Nvidia have begun manufacturing AI servers in Mexico.

Despite facing its own challenges as a production base, including issues of crime, inadequate water and electricity supply, and providing competitive wages for high-tech assembly workers, Mexico is gradually emerging as a key player in advanced manufacturing under the backdrop of US-China tensions, with 14 free trade agreements signed with 50 countries.