Hon Hai acquires land in Texas, said to expand AI server production

Taipei, Nov. 27 (CNA) Manufacturing giant Hon Hai Precision Industry Co. has invested US$33.03 million to buy land and a building in Texas that sources say will be used to expand the company's artificial intelligence server production in the United States.

In a statement posted on the Taiwan Stock Exchange (TWSE), where Taiwan-based Hon Hai's shares are traded, the company said on Tuesday that subsidiary Foxconn Assembly LLC has acquired 478,036 square meters of land and a building with a floor area of 200,200 square meters in Harris County.

The purpose of the purchase was not disclosed, however.

According to Hon Hai's annual report, Foxconn Assembly is registered in Houston. In another announcement released in late August, through subsidiary Cloud Network Technology USA, Hon Hai said it acquired Foxconn Assembly for US$253 million.

Local media recently reported that the iPhone assembler, also known as Foxconn globally, currently rolls out AI servers in Mexico, Wisconsin and Texas in North America and has also set up an AI server research and development center in Houston.

Industry sources said Hon Hai's latest investment in the Houston area was aimed at expanding AI server capacity in Texas and is expected to transform the state into one of the company's AI server hubs.

Tuesday's announcement came soon after U.S. President-elect Donald Trump said he will impose 25 percent tariffs on goods from Canada and Mexico and increase tariffs by 10 percent on imports from China on his first day in office in January.

Due to Trump's tariff threats, shares of Hon Hai shed 3.80 percent in Taipei on Tuesday.

Analysts said Trump's tariff threats could affect the company's investment in Mexico, where it is planning to build a giant AI server factory in partnership with U.S.-based AI chip designer Nvidia Corp. The AI server plant with Nvidia is slated to start production in 2025.

Hon Hai Chairman Young Liu (劉揚偉) responded Wednesday at an industrial technology summit in Taipei that tariff wars are gambles among countries, and that with more than 50 days left before Trump takes office, Hon Hai would take a wait and see attitude on the tariff issue for now.

He reiterated, however, that Hon Hai will continue to invest in the U.S. and Mexico, regardless of the tariff threats, given that Mexico, with a population of more than 100 million people, is itself one of the most important markets in the Americas.

Previously, at an investor conference in mid-October, Liu said his company will continue to invest in AI products and electric vehicles in the U.S. market.

According to Liu, Hon Hai has invested in the U.S. for almost four decades and now operates 50 facilities there with a workforce of about 5,000 people that generate US$25.6 billion in annual sales.