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China's server exports to the U.S. have plummeted from 18.8% in 2017 to 1.7% in 2023, while Taiwan's data center exports to the U.S. have surged, growing from 8.1% to 73% in the same period. Taiwan now produces 90% of the world's AI servers and 100% of U.S.-brand AI servers. This growth has been fueled by U.S. trade restrictions on China, which have intensified since 2018. Taiwan's success in the tech sector has also been bolstered by its resilience in the face of natural disasters, such as earthquakes.
Mexico is also benefiting from Taiwan's dominance in the server space, serving as Taiwan's primary location for back-end assembly of electronics and the U.S.'s top supplier of server imports. Foxconn, Intel, and Qualcomm have heavily invested in Mexican manufacturing facilities, taking advantage of the USMCA deal and Mexico's 50 Free Trade Agreements with other nations.
Meanwhile, China is focusing on domestic production and circulation of tech, aiming to have all state institutions liberated from non-domestic hardware and tech by 2027. Despite U.S. sanctions preventing China from accessing cutting-edge chip manufacturing nodes, China has become a leader in legacy chip production, growing that sector by over 40% in Q1 2024.
Taiwan's dominant position in the global tech market has prompted many nations and companies to seek alternatives, with the U.S. enacting the $280 billion CHIPS Act to reduce its reliance on Taiwan for chips. The shifting dynamics in the tech market continue to unfold, with Taiwan's position at the forefront.
