TECO Electric & Machinery Co. Ltd. and Hon Hai Technology Group (Foxconn) have joined forces in a major step to tap into the rapidly growing AI data center (AIDC) market. The two companies officially unveiled their strategic partnership on July 30 during a joint press conference held at the Taiwan Stock Exchange. This partnership unites TECO’s extensive experience in electromechanical systems with Foxconn’s global leadership in ICT, enabling both companies to co-develop standardized and modularized AI data center solutions.

Under the terms of the agreement, TECO will acquire a 0.519% stake in Foxconn, while Foxconn will secure 10% ownership in TECO. The deal involves a no-cash share exchange, with TECO set to issue 237,644,068 new shares and Foxconn issuing 72,481,441 new shares, reflecting a share ratio of approximately 1:0.305. Both boards have already approved the terms, and the transaction is expected to close in Q4 2025, pending regulatory approval.

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This collaboration directly addresses the rising global demand for advanced AI data center infrastructure. Data centers typically consist of intricate server systems, power equipment, cooling units, and other mission-critical components. By leveraging Foxconn’s strengths in AI servers and TECO’s core expertise in electromechanics, the alliance plans to deliver end-to-end solutions across Taiwan, Asia, the Middle East, and the United States.

Looking forward, the alliance will likely explore broader cooperation within Foxconn’s “3+3+3” strategy, which includes electric vehicles, digital health, and robotics, along with three core technologies and three global market expansions.

TECO Chairman Morris Li emphasized that global shifts are opening doors for innovative collaborations. He highlighted the U.S. operations of TECO-Westinghouse and Foxconn’s American manufacturing presence as a perfect alignment for reshaping the global supply chain. Meanwhile, Foxconn Chairman Young Liu emphasized that in today’s fast-paced, AI-driven world, modular design and quick deployment have become crucial for staying ahead. Partnering with TECO allows both companies to provide vertically integrated, scalable solutions for Tier-1 cloud service providers and hyperscale clients.

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FAQs

1. What is an AI Data Center?

An AI Data Center is a specialized facility designed to support artificial intelligence workloads, such as machine learning and deep learning, by offering high computing power, efficient cooling systems, and robust data infrastructure.

2. Why is the TECO and Foxconn strategic alliance important?

This partnership combines TECO’s industrial machinery capabilities with Foxconn’s IT manufacturing power, enabling both firms to deliver next-gen modular AI data center solutions globally, especially across key regions like the U.S., Middle East, and Asia.

3. How will the share exchange between TECO and Foxconn work?

TECO will issue over 237 million new shares to Foxconn, while Foxconn will issue over 72 million shares to TECO, representing a share exchange ratio of roughly 1 to 0.305. The deal is non-cash and awaits regulatory approval, with completion targeted by late 2025.

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