Inventec to build AI server-related facility in Texas

Taipei, April 29 (CNA) Inventec Corp., one of the leading contract electronics makers in Taiwan, has decided to build a facility in the U.S. state of Texas to roll out artificial intelligence services and related items amid tariff threats posted by U.S. President Donald Trump.

In a statement posted to the Taiwan Stock Exchange (TWSE), where Inventec shares are traded, the company said on Monday that its board of directors has approved a plan to invest up to US$85 million in the United States.

Inventec said it will seek a venue in Texas through its U.S. subsidiary to build the production base and the investment plan will be carried out during May-December, while there is no timetable yet about when the U.S. plant will start mass production.

The fund used in the Texas investment plan will come from its own disposable capital and bank loans, Inventec said.

Inventec said the US$85 million will not cover the purchases of production equipment.

The company said the decision to build a Texas facility aims to lower the impact resulting from the Trump administration's tariff policies after the U.S. president announced on April 2 sweeping reciprocal tariffs on countries that have higher trade surpluses with Washington, including Taiwan, which faces a 32 percent duty.

The White House announced a 90-day pause on the new measures on April 9, with a 10 percent duty applied to all countries except China, to allow its trading partners to negotiate for a lower levy.

Inventec said the U.S. investment is part of its global expansion, while the Texas plant is expected to cater to its American clients and reinforce business ties with them.

Currently, Inventec runs facilities in Mexico to produce a wide range of electronics products such as servers, notebook computers and automotive electronics. According to Inventec, the company has studied the possibility of investing in the U.S. since January as it is not easy to ship expensive servers in terms of their large size to the U.S. market from overseas.

In its annual report, Inventec said it will keep a close eye on the impact on the global supply chain resulting from the U.S. tariff policies and adjust production in its global network in a prompt manner in a bid to maintain its profitability.

Inventec said its server sales will continue to grow in 2025 on the back of a rising popularity of generative AI development, high-performance computing devices, cloud services and 5G smart applications.

In 2024, the company posted about NT$7.2 billion (US$223 million) in net profit, up 18.54 percent from a year earlier with earnings per share at NT$2.03, compared with NT$1.71 in 2023.

Among the major Taiwanese firms, iPhone assembler and AI server maker Hon Hai Precision Industry Co. has also set up a foothold in Texas, as the company has started investments in the U.S. market since 1985.

In addition, Quanta Computer Inc., another AI server supplier, is likely to expand production in its two plants located in California and Tennessee to meet demand from clients, while rival Wistron Corp. announced in December to optimize its facility in Texas.

For its part, Compal Electronics, Inc., another AI server producer, said in January that Texas is one of its top options as it mulls investing in the U.S.