Foxconn Hon Hai Technology Group signage during the Nvidia GPU Technology Conference (GTC) successful San Jose, California, US, connected Thursday, March 20, 2025.
David Paul Morris | Bloomberg | Getty Images
Foxconn connected Wednesday said it is taking a involvement successful TECO Electric & Machinery Co., arsenic it looks to supercharge its efforts to go a cardinal subordinate successful gathering artificial quality information centers.
The Taiwanese firm, formally known arsenic Hon Hai, is looking to replicate the occurrence it has had successful user electronics successful the satellite of AI. It's a play that could unlock Foxconn's entree to a imaginable $1 trillion of spending by companies connected information centers successful the coming years, according to Counterpoint Research, and volition besides pit the Taiwanese elephantine against companies similar ABB, Siemens and Mitsubishi Electric.
Foxconn volition instrumentality a 10% involvement successful TECO arsenic the effect of a stock exchange. TECO started beingness arsenic a motor shaper for cars but has since extended into areas specified arsenic electrical vehicles, vigor retention and information halfway construction. Foxconn meanwhile, which assembles Apple's iPhone and is simply a cardinal spouse for Nvidia, manufactures server racks designed for AI workloads.
The 2 companies are present teaming up to bring their expertise unneurotic to efficaciously make a one-stop-shop for anyone looking to acceptable up an AI information center.
"The strategical concern extends the 2 companies' practice successful the fields of low-carbon astute factories and vigor services, toward being a one-stop solution for information centers going forward," TECO Chairman Morris Li said.
The assembly of AI servers has go a cardinal absorption arsenic Foxconn looks to diversify its gross beyond the manufacturing of user electronics. AI server gross is expected to person doubled successful the 2nd 4th of the year, Foxconn antecedently forecast. The institution has besides shown its willingness to grow into caller areas including the assembly of electrical vehicles and adjacent manufacturing of semiconductors.
"With the AI infrastructure boom, Hon Hai with [a] strategical confederation with TECO aims to widen and tightly integrate the server components and racks worth concatenation from co-design, manufacturing to engineering and infrastructure operation services," Neil Shah, spouse astatine Counterpoint Research, told CNBC.
"Hon Hai aims to go a one-stop store for each the datacenter needs."
Tech giants from Microsoft to Google person already laid retired plans to spend billions of dollars this year unsocial connected information centers, which includes chips and servers — a marketplace that Foxconn is targeting.
Foxconn and TECO said they are targeting concern successful Taiwan and different parts of Asia, arsenic good arsenic the Middle East and the U.S. The 2 companies pointed to their footprint successful the U.S. and said they program to "expand American manufacturing and reshape the planetary proviso chain."
"The afloat information halfway solutions volition springiness beardown impetus to Foxconn's concern arsenic it takes to instrumentality a bigger portion of the wide information halfway CAPEX (capital expenditure) which includes servers to carnal infrastructure," Counterpoint Research's Shah said.
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