Foxconn, TECO Team Up for AI Data Center Dominance with 10% Stake

• Foxconn acquires 10% stake in TECO to lead in AI data center infrastructure.
• Partnership offers end-to-end AI solutions, targeting Taiwan, Asia, the Middle East, and U.S.
• Aims to integrate supply chain, competing with Siemens, ABB in the AI infrastructure market.

Hon Hai Precision Industry is intensifying its focus on AI infrastructure by acquiring a 10% stake in TECO Electric & Machinery Co. through a share-swap deal. This strategic move positions the Taiwanese electronics giant, renowned for assembling Apple’s iPhones, to lead in the global race for next-generation AI data centers.

The partnership leverages Foxconn’s manufacturing prowess and TECO’s expertise in electric vehicles, energy storage, and industrial construction to create a comprehensive AI data center solution.

The alliance aims to deliver a “one-stop shop” for AI data centers, encompassing server component design, manufacturing, and full-scale infrastructure deployment. Targeting markets in Taiwan, Asia, the Middle East, and the United States, the collaboration builds on the companies’ existing manufacturing presence. “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,” said TECO Chairman Morris Li.

The transition of Foxconn is stimulated by the booming need of artificial processing power, and the AI server revenues are expected to increase twice in Q2 2025. These are high-performance computing servers that have the capability of supporting large language models and generative AI tools.

Also Read: Skild AI Launches Skild Brain to Give Robots Human Like Skills

Partnering with Nvidia, Foxconn is already a key player in AI server production. The TECO alliance enhances its offerings, integrating energy-efficient cooling and power systems critical for hyper-scale data centers.

Counterpoint Research’s Neil Shah noted, “With the AI infrastructure boom, Hon Hai, with a strategic alliance with TECO, aims to extend and tightly integrate the server components and racks value chain from co-design, manufacturing to engineering and infrastructure construction services.” This vertically integrated approach positions Foxconn to compete with global giants such as Siemens and ABB, targeting major contracts from tech giants like Microsoft and Amazon, which is investing billions in AI infrastructure in 2025.

The partnership also aligns with geopolitical trends, emphasizing localized production in AI and semiconductors. By combining TECO’s infrastructure capabilities with Foxconn’s electronics expertise, the alliance aims to reshape global supply chains and support U.S. manufacturing, solidifying Foxconn’s role as a pivotal supplier in the AI ecosystem.