Hon Hai Precision Industry Co. (Foxconn) and Teco Electric & Machinery Co. have formed a strategic alliance to boost their AI hardware capabilities. The agreement involves a share exchange, with Teco taking a 0.519% stake in Foxconn, while Foxconn will own 10% of Teco. This move aims to combine Foxconn's expertise in electronics manufacturing and AI server production with Teco's strengths in electromechanical engineering and green energy innovation.
The collaboration focuses on the growing market for AI data centres, leveraging the trend towards standardisation and modularisation. The companies plan to offer comprehensive data centre products, electromechanical engineering services and cost-effective solutions to global customers. Foxconn aims to capitalise on the global trend of AI data centre construction toward standardisation and modularisation. Both boards have approved the terms, with the transaction expected to close in the fourth quarter, pending regulatory approvals.
Foxconn's Chairman, Young Liu, emphasised the importance of time-to-market and modular design in the super-computing race. Teco's Chairman, Morris Li, highlighted the new opportunities for business and cooperation arising from changing global dynamics. The alliance seeks to provide vertically integrated solutions to Tier-1 CSPs and hyperscalers.