#Taiwan #Taipei #Foxconn #AI Data Centers #TECO

Strategic Alliance between Foxconn and TECO: Advancing AI Data Center Capabilities

In a significant announcement made on July 31, 2025, Hon Hai Technology Group, known as Foxconn, and TECO Electric & Machinery Co Ltd unveiled their strategic collaboration aimed at boosting their AI data center capabilities. This partnership positions the two Taiwanese tech giants to capitalize on critical market opportunities in the ever-evolving landscape of supercomputing.

The collaboration is marked by a stock exchange agreement where Foxconn, the largest electronic manufacturing service provider and AI server producer globally, joins forces with TECO, a leader in electromechanical engineering and green energy innovation. This merger of expertise aims to explore business opportunities associated with AI data centers, particularly amid the global trend towards standardization and modularization in data center construction.

Partnership Details

According to the approved terms by both companies' boards, TECO will acquire a 0.519% stake in Foxconn's officially listed entity, Hon Hai Precision Industry Co Ltd. In exchange, Foxconn will hold a 10% share of TECO. This exchange will involve TECO issuing approximately 237,644,068 new shares to Foxconn, while Foxconn will reciprocate by providing around 72,481,441 new shares to TECO, establishing an exchange ratio of about 1 to 0.305. The transaction is expected to be completed in Q4 2025, pending regulatory approvals.

Foxconn's President, Young Liu, emphasized the urgency of speed in the global supercomputer race. He noted, “Modular design is gaining traction. As AI data centers expand and demand rises, partnering with TECO allows us to upscale and provide comprehensive, vertically integrated solutions to our clients, including tier 1 cloud solution providers and hyperscalers.” This integration is set to deliver modular products for data centers, electromechanical engineering services, and cost-competitive total solutions to clients worldwide.

Morris Li, President of TECO, echoed this sentiment, stating, “The evolving global dynamics create new business opportunities and collaboration avenues. This strategic partnership broadens our cooperation into low-carbon smart factory solutions and energy services, positioning us as a single-source solution for the future of data centers.”

Target Markets and Future Implications

The strategic alliance aims to target key markets such as Taiwan, Asia, the Middle East, and the United States. TECO-Westinghouse, a Texas-based leader in electric motor manufacturing, will contribute its American manufacturing and local services to add value. Combined with Foxconn's U.S. production base, they intend to broaden their American manufacturing footprint, thus reshaping the global supply chain landscape.

The strategic importance of this union lies not only in enhancing their AI data center capabilities but also in setting a precedent for future collaborations in the technology sector. Both companies are set to leverage their respective strengths, combining Foxconn's vast manufacturing resources with TECO's engineering expertise, to create advanced solutions that meet the growing demands of AI applications and infrastructure.

Conclusion

In conclusion, the alliance between Foxconn and TECO signals a robust commitment to advancing AI technology and infrastructure. As they navigate the competitive realm of supercomputing, this partnership exemplifies how collaboration can pave the way for innovation and meet the rising global demand for sophisticated data center solutions.