Foxconn and TECO have announced a strategic share-swap alliance to enhance their support for the global AI infrastructure market. This partnership intends to bolster their capabilities, particularly in modular AI data center infrastructure.
Foxconn specializes in electronics manufacturing services and AI server production. Meanwhile, TECO is recognized for its strengths in industrial electromechanical systems and green energy. Combining these capabilities, they plan to tap into the standardized and modular AI data center market, offering a suite of modular products, engineering services, and turnkey solutions for global customers.
The financial structure of the alliance includes TECO acquiring a 0.519% stake in Hon Hai Precision Industry, with Foxconn obtaining a 10% interest in TECO. The details involve TECO issuing 237,644,068 new shares to Foxconn, while Foxconn will issue 72,481,441 shares in return. This arrangement, characterized as non-cash, is anticipated to close by late 2025 after receiving regulatory approvals.
This cooperation expands beyond AI data centers. It also leverages previous collaborations between Foxconn and TECO in energy-saving and emission-reduction initiatives within factories. Foxconn’s Chairman, Young Liu, emphasized the importance of time-to-market in the evolving landscape of super-computing and expressed optimism about the benefits of this partnership for their customers – primarily Tier-1 CSPs and hyperscalers.
TECO’s Chairman, Morris Li, highlighted the potential offered by the changing global dynamics. He noted that this partnership aligns with their strategies for low-carbon smart factories and energy services, further offering a one-stop solution for future data centers.
Focusing on markets in Taiwan, Asia, the Middle East, and the U.S., Foxconn aims to pioneer modular data centers supported by its AI server manufacturing prowess and widespread client base. Concurrently, TECO will leverage its Texas-based TECO-Westinghouse subsidiary to infuse American industrial expertise and local service frameworks.
