Hon Hai Technology Group (Foxconn) and TECO Electric & Machinery Co Ltd (TECO) have formed a strategic alliance that will strengthen their AI infrastructure capabilities. Furthermore, this alliance will further propel the two Taiwanese tech companies’ entry into key markets in the global super-computing race.

Benefits Customer With One-Stop Solutions

In the alliance, the two companies will aim to jointly explore AI data center business opportunities. This will allow their global customers to tap comprehensive data center modular products, electromechanical engineering services, and cost-competitive, one-stop solutions.

Most importantly, this collaboration will bring together the strengths of Foxconn as the largest electronics manufacturing service provide and AI server producer, and that of TECO as an industrial electro-mechanical engineering and green energy advocate.

In the no-cash transaction deal, TECO will take a 0.519 percent stake in Hon Hai Precision Industry Co Ltd. In turn, Foxconn will own 10% in TECO, implying a share exchange ratio of approx. 1 to 0.305.

Foxconn Chairman Young Liu said, “Time-to-market is key in the global super-computing race. Modular design is gaining popularity. As AI data centers grow in size and demand ramps higher, teaming up with TECO means both companies are able to level up and rapidly deliver comprehensive, vertically-integrated solutions to our customers – the Tier-1 CSPs and hyperscalers.”

Meanwhile, TECO Chairman Morris Li said, “Changing global dynamics are creating new opportunities for business and cooperation. The strategic partnership extends the two companies’ cooperation in the fields of low-carbon smart factories and energy services, toward being a one-stop solution for data centers going forward.”

Extends Value Chain Across Markets

Foxconn has deep vertical integration capabilities in manufacturing AI server racks and an unrivaled customer base. Liu said Foxconn will actively develop a modular architecture for AI data centers. With TECO, they will aim to extend the value chain from server components and racks to data center construction.

Li said that Texas-based TECO-Westinghouse has the advantages of American manufacturing and local services. Together with Foxconn’s manufacturing base in the United States, it is in line with the strategic direction of the two companies to expand American manufacturing and reshape the global supply chain.

Previously cooperating in factory energy saving and emission reduction, TECO and Foxconn have started discussions on establishing data center business in Taiwan and the United States. Since a data center is mainly composed of equipment inside the computer room such as servers, cooling systems, UPS, etc., and power infrastructure outside the computer room, the strategic alliance integrates the combined strengths each bring in their respective fields of AI servers, electromechanics, and information and communications. Going forward, the strategic alliance will explore the possibility of expanding cooperation in Foxconn’s “3+3+3” areas.

08 August 2025