To dodge tariffs, Pegatron is opening a US server factory, boosting AI and EV production. With global expansion, the company eyes strong growth in 2025.
Taiwan’s Pegatron Corp. has recently announced plans to establish a new server manufacturing facility in the United States this year, responding to US President Donald Trump’s revised tariff policy. This will be the company’s second server production site, complementing its existing plant in Taoyuan.
In recent years, Pegatron has diversified its operations, venturing into server production to balance its product portfolio. According to a report by Taipei Times, the company aims to be closer to its customers. CEO Gary Cheng states that the new facility will allow Pegatron to scale up production within the year.
Pegatron has already made strides in the AI server market, delivering the first Nvidia GB200 chip-powered AI server racks in January to a US-based cloud service provider for testing. Additionally, Pegatron has secured two new contracts to supply general-purpose servers.
Owing to this, Cheng has expressed optimism about securing further orders later this year.
The company’s capital expenditure for 2025 is expected to exceed the initial forecast of US$300 million to US$350 million, primarily focused on expanding manufacturing capacity at overseas locations.
Cheng cited Trump’s tariff policy as a catalyst for increasing investment in non-China facilities, with Pegatron also ramping up production in Vietnam, India, and Mexico to better serve customer needs.
Pegatron’s expansion into electric vehicle (EV) components, such as engine control units and onboard computers, has seen success, including new business with Tesla. Despite ongoing tariff uncertainty, Pegatron remains confident in its prospects, bolstered by a recovering global economy and the growing demand for AI PCs, Wi-Fi 7, and 5G technologies.
For the first quarter, Pegatron anticipates a modest decline in computing product shipments due to seasonal factors but expects stable performance in the second quarter. Pegatron’s net profit for 2024 increased by 7.4 per cent, reaching NT$19.15 billion, though revenue contracted by 10.5 per cent.
