Foxconn Takes 10% Stake in TECO to Build AI Data Centres

Hon Hai Precision Industry Co., better known as Foxconn, has agreed to take a 10% stake in Taiwanese industrial-motor maker TECO Electric & Machinery through a share-swap that will give TECO about 0.519% of Foxconn. The strategic alliance, unveiled on 30 July, will focus on building standardized, modular artificial-intelligence data centres in Taiwan, the United States, the Middle East and other markets. The partnership combines Foxconn’s expertise in AI server racks, cooling systems and uninterruptible power supplies with TECO’s experience in power infrastructure for data centres. Their first projects include work tied to the US-led “Stargate” AI-infrastructure programme, positioning the companies as a one-stop provider of design, manufacturing and engineering services for next-generation facilities. Foxconn is moving beyond its core role as Apple’s main iPhone assembler as it chases what research firm Counterpoint projects to be a US$1 trillion wave of corporate spending on AI data-centre capacity. The company said revenue from AI servers doubled in the second quarter and is expected to keep climbing as tech companies ramp up capital expenditure. For TECO, Taiwan’s largest maker of industrial motors, the deal accelerates a push into data-centre infrastructure that began earlier this year with the purchase of an 80% stake in Malaysia’s NCL Energy and the winning of projects in Selangor and Johor Bahru. Both Foxconn and TECO temporarily suspended trading in their shares ahead of announcing the transaction.