Foxconn noted that customers worldwide will benefit from a complete suite of modular data center products, engineering services, and turnkey solutions.
Taiwanese company Hon Hai Technology Group (Foxconn) and TECO Electric & Machinery have announced a strategic share-swap alliance aimed at enhancing their infrastructure capabilities and ability to jointly compete in the global AI infrastructure field, the former said in a release.
The partnership combines Foxconn’s position as a global electronics manufacturing service provider and AI server producer with TECO’s expertise in industrial electromechanical systems and green energy. Together, the two firms aim to pursue opportunities in the growing standardized and modular AI data center (AIDC) market.
The Taiwanese manufacturer noted that customers worldwide will benefit from a complete suite of modular data center products, engineering services, and competitive turnkey solutions.
Under the approved deal, TECO will acquire a 0.519% stake in Hon Hai Precision Industry, while Foxconn will take a 10% stake in TECO. TECO will issue 237,644,068 new shares to Foxconn, and Foxconn will issue 72,481,441 new shares to TECO — resulting in an approximate exchange ratio of 1:0.305. This non-cash transaction is expected to close in the last quarter of 2025, pending regulatory clearance.
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.”
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.”
The two companies plan to target key markets in Taiwan, Asia, the Middle East, and the U.S. Foxconn will focus on developing modular architectures for data centers, leveraging its vertically integrated AI server manufacturing and expansive customer base. Meanwhile, TECO will contribute capabilities from its Texas-based TECO-Westinghouse unit, which brings American manufacturing expertise and local service infrastructure, the company said.
The partners had previously cooperated in factory energy saving and emission reduction, and ESCO (Energy Service Company) services.
Since a data center is mainly composed of equipment inside the computer room 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, the partners said.
