Foxconn is stepping beyond its roots in consumer electronics as it accelerates into the artificial intelligence infrastructure sector.
On Wednesday, the Taiwanese company announced it will acquire a 10% stake in TECO Electric & Machinery Co., marking a strategic move to establish itself as a key provider of end-to-end solutions for AI data centres.
The collaboration aims to tap into what Counterpoint Research estimates could be a $1 trillion market in global data centre investment over the next several years.
The deal involves a share exchange between the two firms, enabling them to merge their expertise in energy-efficient infrastructure and AI-optimised server manufacturing.
The partnership is designed to create a one-stop-shop model for AI data centre development across Asia, the Middle East, and the US.
Foxconn targets global data centre CAPEX
Foxconn, also known as Hon Hai, is a central manufacturer for Apple and Nvidia and has recently shifted its focus to the AI server market.
The company produces server racks engineered specifically for AI workloads. It previously forecast that its AI server revenue would double in the second quarter of the year.
Through the alliance with TECO, which began as a car engine manufacturer but now operates in electric vehicles, energy storage, and data centre construction, Foxconn is looking to expand its reach along the entire value chain — from component co-design and engineering to complete infrastructure construction services.
The companies aim to offer bundled services to capture a larger share of global data centre capital expenditure.
Counterpoint Research’s Neil Shah stated that Foxconn’s push into this space aligns with the AI infrastructure boom and will position the company as a comprehensive provider in the segment.
Manufacturing presence to expand in US and Asia
Both companies noted their existing manufacturing footprint in the US, emphasising plans to further grow their operations and shift elements of the global supply chain.
This expansion is likely to align with broader efforts by tech and infrastructure providers to localise production and reduce dependencies on single-region suppliers.
With major technology firms such as Google and Microsoft planning to invest billions in data centres this year, the demand for integrated, AI-ready infrastructure is rapidly growing.
Foxconn and TECO’s new partnership is set to capitalise on that trend by offering services tailored to the specific needs of AI-driven operations.
Foxconn diversifies beyond electronics and into energy
The announcement further underlines Foxconn’s broader diversification strategy.
Aside from AI servers, the firm has made moves into electric vehicle manufacturing and semiconductors.
Its partnership with TECO now gives it a foothold in the physical layer of digital infrastructure, combining electronics, energy services, and construction.
TECO’s capabilities in low-carbon smart factories and power solutions complement Foxconn’s manufacturing specialities.
This integration will allow them to cater to the complete lifecycle of AI data centre creation, from hardware assembly to site development, a move that may significantly boost Foxconn’s share of high-value infrastructure projects.
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