Taiwan, China supply chain shifts to Mexico

Source: Tiantian IC

    Supply chain restructuring, coupled with the proximity to the US market, has led to active expansion of Taiwanese factories such as Asus, Hon Hai, Dongyuan, and Heda into Mexico, with products covering electric vehicle parts, industrial motors, server assembly, automotive parts, and industrial computer applications.

    The Taiwan factory is actively expanding its presence in Mexico. The legal representative pointed out that the trend of supply chain restructuring and the tariff free incentives of the US Mexico Canada Agreement (USMCA), coupled with Mexico‘s proximity to the US market, have accelerated the expansion of Taiwan‘s production capacity in Mexico.

    On the 25th, Asus announced that it will invest approximately NT $2.421 billion in its Mexican subsidiary to boost its electric vehicle business. The legal representative pointed out that the Asus Mexico factory mainly produces automotive products, and its biggest customer is Tesla, a major American electric vehicle manufacturer.

    Hon Hai Group continues to expand its presence in Mexico and announced in early January that its subsidiary will increase its investment of $10 million in Ingrasys Technology‘s Mexico plant. According to market evaluations, this investment will mainly expand its server assembly business.

    Last September, Hon Hai Group established a strategic partnership with the government of Chihuahua in northern Mexico, targeting the development of telecommunications, automotive, and renewable energy.

    Hon Hai Group has been laying out in Mexico for many years. According to information, Hon Hai Group‘s subsidiaries Fuzhikang, PCE Paragon Solutions, Foxteq, Hongteng 6088 Precision Technology, and logistics related enterprises Jijida have all established bases in Mexico.

    The high efficiency and low voltage motor factory of Dongyuan Mexico, a major electromechanical company, was completed and put into operation in mid September last year. Dongyuan transferred some of its Asian production capacity to a new factory in Mexico, reducing long-term risks in the nearby supply market. The new factory can also connect with Dongyuan Westinghouse motor factory in Texas, USA to seize the markets in the United States, Canada, Central and South America, as well as domestic business opportunities in Mexico.

    The automobile transmission system manufacturing plant and the new factory in New Mexico, USA continue to start construction this year, supplying key components for Tesla electric vehicles nearby, and the new factory will also connect the Mexican automotive supply chain.

    Huangtian Industry, a car curtain factory, will produce safety airbag application products at its Mexico factory this year. It is expected to produce in the second quarter and fully open production capacity and contribute to revenue in the third quarter.

    Automobile water tank supplier Jimao Precision is promoting a plan to expand its production base for water tank radiators in Mexico this year. It is estimated that a small batch of production will be carried out in the first quarter, and external orders will be placed for mass production starting from the second quarter. The Mexican factory can inject revenue this year.

    Huasheng KY, a car decoration factory, has a subsidiary in Mexico that serves brand car factories nearby. Huasheng KY pointed out that this year, it is expected to ship in overseas markets outside of China, especially in the North American market. It is estimated that the overseas market share can increase to 13% this year.

    Industrial computer factory Shixinke also plans to expand its production capacity and factory building in Mexico to meet future demand for new orders. In the second half of 2022, Huanxu Electronics, a subsidiary of the major testing company Riyuguang Investment Control, purchased land from a factory in Mexico and built a second factory in Guadalajara, a large industrial center in Mexico. It is expected to be completed and put into operation this year.