Foxconn and TECO Join Forces for AI Data Center Collaboration

Strategic Alliance for AI Data Centers

On July 31, 2025, Hon Hai Technology Group, widely known as Foxconn, and TECO Electric & Machinery Co Ltd announced a significant strategic alliance that aims to elevate their capabilities in constructing artificial intelligence (AI) data centers. This collaboration is set to enhance their influence in the rapidly evolving global super-computing sector.

The strategic partnership involves a stock exchange agreement that enables both companies to combine their strengths. Foxconn, recognized globally as the largest provider of electronics manufacturing services and a key player in AI server manufacturing, joins forces with TECO, an industry leader in electromechanical engineering and green energy innovation. Together, they aim to standardize and modularize the design and deployment of AI data centers, capitalizing on emerging market opportunities.

Key Aspects of the Alliance

Under the framework of this alliance, Foxconn will issue 237,644,068 new shares of its stock, while TECO will be granted 72,481,441 shares, leading to a stock exchange ratio of approximately 1 to 0.305. TECO is set to acquire a 0.519% stake in Foxconn’s publicly traded arm, Hon Hai Precision Industry Co Ltd. This transaction is expected to be completed in the fourth quarter of 2025, pending regulatory approval.

Young Liu, the Chairman of Foxconn, emphasized the importance of speed to market in the global super-computing race. He highlighted that the demand for larger AI data centers is on the rise, necessitating collaborative efforts to provide comprehensive vertically integrated solutions tailored to the needs of major cloud service providers and hyperscalers.

TECO's Chairman, Morris Li, stated that the shifting global dynamics create fresh avenues for collaboration and business expansion. The partnership will also enhance cooperation between both companies in developing low-carbon intelligent factories and energy services, with an eye on delivering all-encompassing solutions for future data center demands.

Target Markets and Future Outlook

Both companies have identified Taiwan, Asia, the Middle East, and the United States as primary target markets. TECO-Westinghouse, based in Texas and known for manufacturing electric motors, aligns strategically with Foxconn's aims to boost US manufacturing and reshape global supply chains. The alliance is anticipated to drive innovation within the AI data center sector, leveraging the expertise of both organizations to deliver superior solutions.

In summary, the collaboration between Foxconn and TECO represents a significant step towards enhancing the capabilities and services in the AI data center landscape. As technology continues to evolve, this strategic alliance positions both companies favorably to meet the growing demands of the global market.

Conclusion

In the context of a rapidly digitizing world, the convergence of expertise from Foxconn and TECO creates a powerful synergy that stands to benefit a wide range of stakeholders. Industry observers and clients alike will be keenly watching the developments following this monumental partnership in the quest to lead the AI-driven future.