The electronics supply chain continues to change. Foxconn has just stated that it is to expand its facilities in Mexico to build the latest ‘Blackwell’ server platform from Nvidia. Speaking at a Foxconn corporate event, Benjamin Ting, senior vice-president at the cloud enterprise solutions business group of Foxconn said that the company was building “the largest GB200 production facility on the planet”. The ‘Blackwell’ servers use the Nvidia GB200 semiconductor which has just been trialled with server providers through August and now Nvidia is looking to commence production. The introduction of these types of technologies are an attempt to provide the infrastructure for the ‘Artificial Intelligence’ capabilities being deployed by the Silicon Valley giants.
Foxconn has had a presence in Mexico for several years, with its main assembly location being in the state of Chihuahua. The development of this location is explained by Foxconn as being an attempt to exploit the “opportunities from nearshoring”.
Admittedly the servers that Foxconn is looking to build are complex pieces of equipment and distinctly different from the consumer products that Foxconn built its business around. However, that such significant electronics production is now located in Mexico represents an important change in the nature of the electronics supply chain. Foxconn above all, is a company rooted in assembly operations in mainland China, although the company is Taiwanese. All of its early facilities were located in eastern China and the scale of its facilities there were what enabled it to attract business from the largest consumer hardware providers. Today, Foxconn has a number of large competitors in China, however the real change has been Foxconn’s diversification away from Chinese assembly sites with the construction of facilities not just in locations adjacent to China, in South East Asia, but now in India and even Central Europe. This is not just ‘near-shoring’ but rather a diversification away from China driven by its customers.
The implications for logistics are obviously substantial. For many years trans-Pacific airfreight has been heavily driven by electronics, whilst many other regions have had minimal presence of the relevant logistics services. This is clearly changing and electronics logistics provision seems set to be increasingly global.
Source: Ti Insight
Author: Thomas Cullen
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