TECO Electric & Machinery and Hon Hai Technology Group (Foxconn) Announce Strategic Alliance Targeting AI Data Center Capabilities

Core Insights - TECO Electric & Machinery Co Ltd and Hon Hai Technology Group (Foxconn) have announced a strategic alliance through a share exchange to enhance their capabilities in AI data centers [1][2] - The partnership aims to leverage TECO's strengths in electromechanical systems and Foxconn's expertise in ICT to capitalize on the global trend towards AI data center standardization and modularization [1][3] Share Exchange Details - TECO will acquire a 0.519% stake in Foxconn, while Foxconn will take a 10% stake in TECO, involving the issuance of 237,644,068 new shares by TECO and 72,481,441 new shares by Foxconn, with a share exchange ratio of approximately 1 to 0.305 [2] - The transaction is expected to be completed in the fourth quarter of 2025, pending regulatory approvals [2] Strategic Focus - The alliance will explore opportunities in data center business development in Taiwan and the United States, integrating strengths in AI servers, electromechanics, and information and communications [3] - Target markets include Taiwan, Asia, the Middle East, and the US, providing comprehensive data center modular products and cost-competitive solutions [3] Leadership Perspectives - TECO Chairman Morris Li emphasized the partnership's potential to create a one-stop solution for data centers, aligning with the companies' goals to enhance American manufacturing and reshape the global supply chain [4] - Foxconn Chairman Young Liu highlighted the importance of time-to-market in the super-computing race and the need for modular design to meet growing demand in AI data centers [4] Sustainability Commitment - Both companies aim to enhance a low-carbon smart industry chain through this strategic alliance, aligning with international sustainability trends [5] - TECO and Foxconn have been recognized in the S&P Global Sustainability Yearbook 2025, reflecting their commitment to corporate sustainability [5] Company Backgrounds - TECO, founded in 1956, is a leading industrial motor producer and has expanded into ESCO energy services, EV powertrain systems, and data center engineering [6][7] - Foxconn, established in 1974, is the world's largest electronics manufacturer, with a revenue of approximately USD 208 billion in 2024 and a market share exceeding 40% in electronics manufacturing services [9]