Hon Hai Technology Group (Foxconn) and TECO Announce Strategic Alliance Targeting AI Data Center Capabilities
Electromechanics, ICT, key markets get boost in new shares exchange30 July 2025, Taipei, Taiwan – Hon Hai Technology Group (“Foxconn”) (TWSE:2317) and TECO Electric
& Machinery Co Ltd (“TECO”) (TWSE:1504) on Wednesday announced a share
exchange, strategic alliance that will strengthen their AI infrastructure
capabilities and propel the two Taiwanese tech majors into key markets in the
global super-computing race.
The move
brings together the strengths of Foxconn, the world’s largest electronics
manufacturing service provider and AI server producer, and TECO, a leader in
industrial electro-mechanical engineering and green energy innovation. Seizing
on the development of global AI data center (AIDC) construction towards
standardization and modularization, the two companies will jointly explore AIDC
business opportunities. Global customers will be able to tap comprehensive data
center modular products, electromechanical engineering services, and cost-competitive,
one-stop solutions.
According to
terms approved by both boards, respectively, TECO will take a 0.519% stake in
Hon Hai Precision Industry Co Ltd, the formal name Foxconn trades on at the
Taiwan Stock Exchange. In turn, Foxconn will own 10% in TECO. The latter will
issue 237,644,068 new shares to Foxconn, and Foxconn will issue 72,481,441 new
shares to TECO, implying a share exchange ratio of approx. 1 to 0.305. The no-cash
transaction is targeted to complete in the fourth quarter of this year,
conditional on regulatory approvals.
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.”
Target
markets cover Taiwan and Asia, as well as the Middle East and the US.
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, and with TECO aim to extend the value chain
from server components and racks to data center construction.
Li said that
Texas-based TECO-Westinghouse, a longstanding world leader in manufacturing
electric motors, 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, and ESCO energy
services, 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 (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.
As
bellwethers in sustainability, both companies will use the strategic alliance
as a starting point to enhance a low-carbon smart industry chain that aligns
with international trends, and support supply chain resiliency and innovation.
Both TECO and Foxconn were named in S&P Global’s
Sustainability Yearbook 2025, a milestone ranking that demonstrates corporate
sustainability strength.
About
TECO
Founded in 1956 as
a motor manufacturer, TECO Electric & Machinery Co., Ltd. (“TECO”) has grown into one of the world’s top five industrial motor producers.
Today, TECO operates across three core business groups—Green Mechatronic
Solutions, Intelligence Energy, and Air & Intelligent Life—building a green
ecosystem for energy generation, storage, and efficiency.
Beyond motors, TECO
has expanded into ESCO energy services, EV powertrain systems, and data center
engineering. The company is a market leader in Taiwan’s onshore substations for
offshore wind (2.5 GW), has delivered over 700 MW of data center projects across
Southeast Asia, and holds more than 85% of Taiwan’s e-bus powertrain market,
with recent expansion into India.
TECO’s vision is to
become the key driver in realizing global electrification, intelligence, and
green energy. It has been included for five consecutive years in both the Dow
Jones Best in Class Indices and the S&P Global Sustainability Yearbook, and
has received the Taiwan Corporate Sustainability Award for eleven straight
years. To learn more, visit www.teco.com.tw
About Foxconn
Established
in 1974 in Taiwan, Hon Hai Technology Group (“Foxconn”) (TWSE:2317) is the
world’s largest electronics manufacturer and leading technological solutions
provider, ranking 28th among the Fortune Global 500. In 2024, revenue totaled
TWD6.86 trillion (approx. USD208 billion). The Group’s market share in
electronics manufacturing services (EMS) exceeds 40%. The Group operates over
230 campuses across 24 countries and is one of the world’s largest employers
with approx. 900,000 employees during peak manufacturing season. The Group has
expanded its capabilities into the development of electric vehicles, digital
health, and robotics, and three key technologies – artificial intelligence,
semiconductors and next-generation communications technology. Pulling it
together with its three intelligent platforms – Smart Manufacturing, Smart EV,
Smart City – the “3+3+3” strategy is key to driving the Group’s long-term
growth. Foxconn is dedicated to championing environmental sustainability in the
manufacturing process and serving as a best-practice model for global
enterprises. To learn more, visit www.honhai.com
2025/07/30