TAIPEI, Sept 20 (Reuters) - Tesla supplier Hota Industrial Mfg. Co will invest $99 million to build its first plant outside of Asia in the U.S. state of New Mexico, the Taiwanese company said on Wednesday, citing greater emphasis on regional production in supply chains.

Hota, which makes gears and other auto components primarily in Taiwan, said it would begin construction on the factory in Santa Teresa, near the U.S. border with Mexico, early next year and mass production in 2025.

"With three years of COVID-19 and the U.S.-China trade war changing globalization and creating regional supply chains, we restarted our thinking about going to the United States to make a deeper investment," Chairman David Shen told a news conference in Taipei on Wednesday.

Proximity to North American customers, which account for 60% of Hota's sales, and the flourishing U.S. electric vehicle (EV) industry were also key factors, Shen said.

"We have the right infrastructure to meet the growing demands of Taiwanese companies, and their manufacturing expertise is very beneficial because we don't start it from scratch," New Mexico Governor Michelle Lujan Grisham told Reuters in an interview after the announcement.

"We can't compete with the Gear King," she said, referring to Shen's nickname in Taiwan.

The state will provide $3 million in funding, with the potential for additional tax credits.

Next door in Arizona, Taiwanese chipmaker TSMC has committed $40 billion to build two chip factories, amounting to one of the largest foreign direct investments in U.S. history and supporting Washington's plans to boost domestic chipmaking.

Hota is a key supplier to Tesla, GM and Ford .

James Huang, chairman of the Taiwan External Trade Development Council, said EVs would be an important focus for bilateral trade and especially in New Mexico.

"New Mexico will become a very important stronghold for the U.S. electric vehicle supply chain, so the future impact of these investments between Taiwan and the United States will be wide-ranging," Huang said on the sidelines of a U.S.-Taiwan business forum on Tuesday. (Reporting by Sarah Wu Editing by Mark Potter)