Hota Industrial Mfg. Co, a prominent supplier to Tesla, has unveiled plans to establish its inaugural manufacturing facility in the New Mexico Borderplex region of the United States.
The Taiwanese company is committing $99 million to this venture, marking its first foray beyond the Asian continent. This decision reflects the growing emphasis on regionalized supply chain production.
Hota, primarily engaged in the production of gears and other automotive components in Taiwan, disclosed that construction of the facility will commence in Santa Teresa, situated near the U.S.-Mexico border, early in the coming year. Mass production is expected to commence by 2025.
David Shen, Chairman of Hota, highlighted the transformative impact of factors like the COVID-19 pandemic and the U.S.-China trade tensions on global supply chains, which compelled the company to reevaluate its investment strategy and consider expanding into the United States. Shen conveyed these insights during a press conference held in Taipei.
Shen further noted that the proximity to their North American clientele, constituting 60% of Hota’s sales, and the flourishing U.S. electric vehicle (EV) industry were pivotal factors driving this decision. He emphasized that the existing infrastructure in New Mexico and the manufacturing expertise of Taiwanese companies would prove invaluable, allowing them to hit the ground running.
Governor Michelle Lujan Grisham of New Mexico expressed her enthusiasm for the project, highlighting the state’s capability to meet the demands of Taiwanese companies and referring to Chairman Shen as the “Gear King” in Taiwan. The state has pledged $3 million in funding for the project, with potential additional tax incentives.
Across the border in Arizona, another Taiwanese company, chipmaker TSMC, has announced a $40 billion investment in constructing two chip manufacturing facilities, making it one of the largest foreign direct investments in U.S. history. This aligns with Washington’s initiative to bolster domestic chip production.
Hota plays a crucial role as a supplier to prominent automakers such as Tesla, GM, and Ford.
James Huang, Chairman of the Taiwan External Trade Development Council, highlighted the significance of electric vehicles (EVs) in bilateral trade, particularly in New Mexico. He anticipates that New Mexico will emerge as a crucial hub in the U.S. electric vehicle supply chain, underscoring the far-reaching impact of investments between Taiwan and the United States. These sentiments were expressed during a U.S.-Taiwan business forum held earlier.
MVEDA was proud to join the Governor and her economic Development team on this trade mission to Taiwan where this important announcement took place.
Article Source:
REUTERS
By Sarah Wu
