TECO Electric & Machinery and Foxconn Join Forces for Strategic AI Data Center Development

Major Partnership Announcement: TECO and Foxconn

On July 30, 2025, TECO Electric & Machinery Co. Ltd (TWSE: 1504) and Hon Hai Technology Group, better known as Foxconn (TWSE: 2317), convened at the Taiwan Stock Exchange to reveal an important strategic alliance. This partnership comes as a response to the increasing global demand for artificial intelligence (AI) data centers, focusing on the standardization and modularization trends shaping the industry.

A New Era of Collaboration

The two companies have reached an agreement where TECO will acquire a 0.519% stake in Foxconn, while Foxconn will gain a 10% stake in TECO. This exchange is expected to bolster their capabilities and market positions in the rapidly evolving technology landscape. The planned stock swap will facilitate a seamless transition toward collaborative projects, dynamically aligning both companies' areas of expertise.

TECO's strengths lie in mechanical and electrical systems, while Foxconn's prowess encompasses information and communication technology (ICT). This combination is designed to unlock vast business opportunities across various markets, including Taiwan, Asia, the Middle East, and the United States.

During the press conference, TECO’s President, Morris Li, articulated the vision behind the alliance, stating that the changing global dynamics are paving the way for new business opportunities and cooperative ventures. He emphasized that this alliance could significantly enhance their roles in intelligent factories that prioritize low carbon emissions and energy services.

A Commitment to AI Data Centers

Together, TECO and Foxconn aim to provide integrated solutions for AI data centers. These facilities are complex systems largely comprised of computer room equipment such as servers, cooling systems, and uninterruptible power supplies (UPS), alongside extensive electrical infrastructure. The companies will collaborate to design and manufacture these systems efficiently, targeting advancements that meet the growing market needs.

Foxconn’s President, Young Liu, further emphasized the importance of rapid commercialization in the competitive sector of supercomputing. He noted that modular design is becoming increasingly significant as the size and demand for AI data centers continue to expand. Liu highlighted how the collaboration allows for enhanced speed and quality of solutions for top-tier communications service providers and hyperscalers.

Future Outlook With TECO-Westinghouse

A pivotal component of this partnership is TECO-Westinghouse, based in Texas, which is renowned for its electric motor manufacturing. TECO-Westinghouse brings substantial advantages in U.S. manufacturing and local services, aligning perfectly with the ambitions of both TECO and Foxconn to expand their American operational footprint. As they jointly tackle the challenges of reshaping the supply chain in response to modern demands, the companies set a clear strategic direction that bodes well for their future endeavors.

As TECO and Foxconn embark on this strategic journey, industry analysts and stakeholders are closely monitoring the growth trajectories of both entities. Their innovative approaches to AI data centers hold promise not just for their businesses but also for the entire technology sector as it evolves to meet future demands.

For those interested in learning more about TECO, visit TECO's official website. For additional information on Foxconn, check out Foxconn's website.