Foxconn (TWSE: 2317), the world’s largest contract electronics maker and TECO Electric & Machinery Co Ltd (TWSE: 1504) have announced a strategic alliance through a share exchange agreement aimed at significantly strengthening their capabilities in the rapidly expanding artificial intelligence (AI) data center market. This partnership is set to propel both Taiwanese tech giants into key markets across Taiwan, Asia, the Middle East, and the United States.
The collaboration leverages the distinct strengths of each company: Foxconn, the world’s largest electronics manufacturing service provider and a leading AI server producer, will combine its expertise with TECO’s leadership in industrial electro-mechanical engineering and green energy innovation.
Under the terms approved by both boards, TECO will acquire a 0.519% stake in Foxconn, while Foxconn will obtain a 10% stake in TECO. This no-cash transaction, which involves TECO issuing new shares to Foxconn and Foxconn issuing new shares to TECO, is targeted for completion in the fourth quarter of this year, pending regulatory approvals.
The alliance is specifically designed to capitalize on the global trend of AI data center (AIDC) construction moving towards standardization and modularization. Together, the companies will jointly explore AIDC business opportunities, offering global customers comprehensive data center modular products, electromechanical engineering services, and cost-competitive, one-stop solutions.
Foxconn Chairman Young Liu emphasized the importance of speed in the competitive AI supercomputing race. “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,” Liu stated.
TECO Chairman Morris Li highlighted the new opportunities arising from changing global dynamics. “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,” Li added.
The partnership also aligns with both companies’ strategic aims to expand U.S. manufacturing and reshape global supply chains, particularly through TECO-Westinghouse, a Texas-based leader in electric motors, and Foxconn’s existing U.S. manufacturing bases. This collaboration is poised to redefine how AI infrastructure is built and delivered on a global scale.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter |The Mainstream formerly known as CIO News Whatsapp Channel | The Mainstream formerly known as CIO News Instagram
About us:
The Mainstream formerly known as CIO News is a premier platform dedicated to delivering latest news, updates, and insights from the tech industry. With its strong foundation of intellectual property and thought leadership, the platform is well-positioned to stay ahead of the curve and lead conversations about how technology shapes our world. From its early days as CIO News to its rebranding as The Mainstream on November 28, 2024, it has been expanding its global reach, targeting key markets in the Middle East & Africa, ASEAN, the USA, and the UK. The Mainstream is a vision to put technology at the center of every conversation, inspiring professionals and organizations to embrace the future of tech.
