China-made server exports to US plummet — Taiwan, Mexico remain top server import suppliers

Inspur
(Image credit: Inspur)

China's server exports to the U.S. have fallen from 18.8% of outgoing servers in 2017 to 1.7% in 2023 — a dramatic plunge underscored by Taiwanese gains in the U.S. market — according to DigiTimes Asia. Taiwan's data center exports, on the other hand, have grown heavily in the wake of U.S. trade restrictions, which have increased in intensity against China since 2018. 

In the same five-year period, Taiwan has seen a 900% growth in its share of data centers being sent to the United States: an increase from 8.1% of Taiwanese servers in 2017 to 73% in 2023. The data center market has been a major contributor to the success of Taiwan's tech sector in that time frame, with Taiwan now producing 90% of the world's AI servers, and 100% of U.S.-brand AI servers. This rise in Taiwanese dominance of the tech sector is great news for the small island, whose growth in the market has not been hampered even by their recent bevy of earthquakes

Taiwan is not the only player gaining ground in the server space. Mexico is also seeing dividends as Taiwan's primary location for back-end assembly of electronics and the U.S.'s top supplier of server imports. Foxconn and other Taiwan-based companies have major manufacturing facilities in Mexico and are continuing to fund expansion in the country, both to reduce their need for Chinese manufacturing and to save on trans-Pacific travel. 

Foxconn has joined Intel and Qualcomm in investing heavily in Mexican manufacturing facilities, and Mexico continues to lay strategic tariffs to draw more countries to manufacture in its growing economy. Thanks to the USMCA deal and its world-leading 50 Free Trade Agreements with other nations, Mexico seems well-equipped to emerge a winner in the U.S.-China Chip War. 

China is not happy with this trend of bucking Chinese manufacturing and tech, but it's seizing the opportunity to reject Western tech altogether and focus on domestic production and circulation. China's Document 79 plan outlines the path to having all of its state institutions liberated from non-domestic hardware and tech by 2027, which it's on pace to accomplish. And while U.S. sanctions have prevented China from accessing bleeding-edge chip manufacturing nodes, a hole in the sanctions has allowed China to surge high and become a leader in legacy chip production — growing that sector by over 40% in Q1 2024. 

As the global tech market continues to move and shake, one constant remains: Taiwan's dominant position. Many nations and companies are moving to unlink themselves from Taiwan's spot at the top of the mountain — especially the U.S. The $280 billion CHIPS Act exists almost entirely so the U.S. can avoid catastrophic failure if China impedes Taiwan's ability to provide a supermajority of its chips. 

Freelance News Writer