A new kind of factory

There’s a building in Houston, Texas, that doesn’t look like the future. But inside, it is becoming one. Foxconn, the contract manufacturer long synonymous with iPhones and Chinese megafactories, is now preparing to assemble AI servers for NVIDIA there. It’s a shift that started quietly but has gained pace. Not just because of what’s being made—but how.

For the first time in its half-century history, Foxconn is introducing humanoid robots to the factory floor. The robots will support live production—not simulations or test lines—but in a facility designed to handle high-volume AI server assembly. These robots are powered by NVIDIA’s Isaac GR00T N platform, and the deployment is set to begin in early 2026.

Foxconn has not shared the number of robots being deployed, nor detailed which specific tasks will be automated. But the presence of humanoid robots in an American facility marks a departure from the manufacturing archetype that defined the 2000s. The global supply chain is watching.

Beyond contract assembly

This isn’t just an operational update. It’s a reorientation. Foxconn’s business is changing, and the numbers tell the story clearly. In the second quarter of 2025, its Cloud & Networking division—home to server and AI-related hardware—generated NT$731.8 billion in revenue. That figure surpassed its Consumer Electronics division, which brought in NT$634.5 billion in the same period.

It’s a notable reversal for a company that built its brand as the assembler behind nearly every major smartphone of the last two decades. While Apple remains a key client, Foxconn’s growth now lies in AI infrastructure, not mobile devices. This explains the scale and intent behind its investment in the United States.

Manufacturing closer to the algorithm

While the Texas plant is the element in its state in the U.S., Foxconn’s present 12-state portfolio will expand by having the establishment at the centre of its AI server production. Its location close to major U.S. technology companies and chip suppliers affords much more than simple logistical convenience; it also signals a change in global manufacturing logic—the westward pull of supply chains by data centres and AI workloads.

Speed considerations, customer access, and geopolitics come into the picture here. With tensions rising in East Asia and with a significant focus being placed on technological sovereignty in the U.S., it is only strategic that AI servers be produced in Texas. The alignment between the Biden administration’s push for domestic manufacturing in semiconductors and AI hardware and the plans of Foxconn is clear. In the meantime, the company is not forgiving market demand ahead of anticipated regulatory and political momentum.

Implications for Asia and beyond

This pivot is not without consequences for other regions. Southeast Asian countries like Vietnam and Malaysia, which have positioned themselves as alternatives to China for electronics assembly, may now face a different kind of challenge. The high-end segment of tech manufacturing—servers, AI accelerators, GPU systems—is beginning to consolidate closer to its end markets.

India’s ambitions to become a global electronics hub may also be tested. While it has attracted mobile phone assembly and semiconductor investment, the absence of large-scale AI server production could become a strategic gap. If Foxconn’s U.S. experiment proves cost-effective and politically advantageous, similar projects may bypass Asia altogether.

With the manufacturers and policymakers debating on securing AI supply chains in Europe, this addition adds urgency. And if server production becomes focused in the U.S., then European access to hardware for AI workloads could very well become contingent on transatlantic supply chains.

A challenge to competitors

Foxconn’s shift puts pressure on its peers. Pegatron and Wistron—also major Taiwanese electronics manufacturers—now face the question of whether to invest in AI production lines or double down on existing consumer electronics contracts. U.S.-based players like Jabil and Flex may find themselves squeezed between Foxconn’s scale and the expectations of clients who are watching this Houston rollout closely.

NVIDIA, the anchor client for this expansion, gains from having a trusted supplier localised in the U.S. It also raises the question of whether AMD, Intel, or even hyperscalers like Microsoft and Google will look for similar arrangements. Server production is no longer a back-office operation; it’s now part of national infrastructure discussions.

Robotics in real production

The introduction of humanoid robots isn’t just symbolic. Foxconn has framed this as a necessary part of scaling AI server production. While the company has not disclosed what proportion of tasks will be handled by robots, their presence adds a new layer to the labour model in advanced manufacturing.

Consistency and output are two things that the organisation is going for. Especially with respect to the assembly of servers, where components are expensive and tolerances are small, this precision from robotics lowers the rework and downtime. Whether this will eventually reduce labour costs is yet to be seen, but it is certainly setting some precedent for how AI hardware gets built in an AI era.

Rebuilding the production map

The implications are structural. Foxconn’s move is not just about one factory or one product line. It’s a sign that global production is adapting to AI—not just in what’s built, but where and how.

For nearly two decades, cost was the main determinant in supply chain strategy. Now, geopolitical alignment, national industrial policy, and technological centrality are driving decisions. The AI server is not just another piece of hardware. It is a gateway to controlling how future algorithms are trained, deployed, and scaled.

Foxconn’s Houston facility may be the first of many. If clients respond positively—on quality, lead time, and support—others will follow. The competition may not come down to who can build fastest, but who can build closest.

Factories are changing. The geography is shifting. Foxconn has made its next move.

The industry is recalibrating around it.