TECO Electric and Foxconn Form Strategic Alliance for AI Data Centers

TECO Electric and Foxconn Join Forces in Strategic Alliance for AI Data Centers

In a significant move in the technology sector, TECO Electric & Machinery Co Ltd and Hon Hai Technology Group (often known as Foxconn) have announced their strategic alliance during a joint press conference held on July 30, 2025, at the Taiwan Stock Exchange. This partnership is designed to capitalize on the growing global demand for artificial intelligence (AI) data centers, particularly in light of the ongoing trend towards standardization and modularization in this field.

Details of the Alliance

The alliance arose from a mutual agreement sanctioned by the boards of both companies, marking a notable exchange of shares between the two. TECO will acquire a 0.519% stake in Foxconn, while Foxconn will hold a 10% stake in TECO. Specifically, TECO will issue 237,644,068 new shares to Foxconn, and in return, Foxconn will issue 72,481,441 new shares to TECO. This transaction is paving the way for both firms to expand their reach in the fast-evolving market of AI data centers. The share exchange ratio stands at approximately 1 for 0.305, with the completion of this non-cash deal expected in the fourth quarter of this year, pending regulatory approvals.

Strengthening Core Competencies

The strategic alliance aims to merge the strengths of TECO’s electromechanical systems expertise with Foxconn’s extensive proficiency in information and communications technology (ICT). Data centers primarily consist of the computer room infrastructure, including servers, cooling systems, and uninterruptible power supplies, along with external electrical infrastructures. By coalescing their respective competencies, the two companies are poised to target key markets across Taiwan, Asia, the Middle East, and the United States effectively.

Morris Li, the President of TECO, commented on the partnership, stating, "The evolution of global dynamics opens new avenues for business and cooperation. This strategic agreement extends the cooperative efforts of both companies into areas such as low-carbon smart factories and energy services, aiming to create a unified solution for future data centers." He highlighted the importance of leveraging local manufacturing advantages and US-based production facilities to enhance service delivery.

In addition, Young Liu, President of Foxconn, remarked, "In the race for supercomputers, the speed at which we bring our products to market is critical. As demand for AI data centers accelerates, our collaboration with TECO positions us to upgrade capabilities and deliver comprehensive vertical solutions to our clients, including major cloud service providers (CSPs) and hyperscalers." This emphasis on rapid deployment and integrated solutions underscores the strategic vision of the alliance and the anticipated competitiveness in the global AI data center market.

Conclusion

The collaboration between TECO Electric & Machinery and Foxconn signifies a crucial step towards meeting the burgeoning requirements of AI data infrastructures. As both companies prepare to synergize their strengths, they are setting the stage for robust growth in a key technological sector. For further insights about their respective offerings, interested parties can explore TECO's site at Teco.com and Foxconn's site at Honhai.com.