output
During a build, Next.js will automatically trace each page and its dependencies to determine all of the files that are needed for deploying a production version of your application.
This feature helps reduce the size of deployments drastically. Previously, when deploying with Docker you would need to have all files from your package's dependencies installed to run next start. Starting with Next.js 12, you can leverage Output File Tracing in the .next/ directory to only include the necessary files.
Furthermore, this removes the need for the deprecated serverless target which can cause various issues and also creates unnecessary duplication.
How it Works
During next build, Next.js will use @vercel/nft to statically analyze import, require, and fs usage to determine all files that a page might load.
Next.js' production server is also traced for its needed files and output at .next/next-server.js.nft.json which can be leveraged in production.