^{Foxconn Hon Hai Technology Group signage during the Nvidia GPU Technology Conference (GTC) in San Jose, California, US, on Thursday, March 20, 2025. | David Paul Morris | Bloomberg | Getty Images}

Foxconn Makes Strategic Move into AI Data Center Infrastructure

Foxconn, best known for assembling Apple’s iPhones, is now pivoting aggressively into artificial intelligence infrastructure, setting its sights on the fast-expanding global data center market expected to exceed $1 trillion in spending over the next several years.

On Wednesday, the Taiwanese electronics giant, formally known as Hon Hai Precision Industry Co., announced it will acquire a 10% stake in TECO Electric & Machinery Co. through a share swap. This marks the beginning of a deeper partnership that could position Foxconn as a dominant player in AI server and data center construction.

Partnership Overview: TECO and Foxconn Unite

TECO, once a car engine maker, has evolved into a diversified player in electric vehicles, energy storage systems, and industrial infrastructure. Foxconn, meanwhile, brings to the table deep expertise in electronics manufacturing, server rack production for AI workloads, and long-standing partnerships with tech leaders like Nvidia.

Together, the companies aim to deliver end-to-end AI data center solutions — from co-design and server manufacturing to full infrastructure engineering and construction. The goal is to become a one-stop shop for clients building next-generation AI facilities.

“This strategic partnership expands our cooperation across low-carbon smart factories and energy services, forming a unified solution for future data center projects,” said TECO Chairman Morris Li.

Foxconn’s AI Ambitions Go Global

Foxconn has been increasingly focused on diversifying beyond consumer electronics. The company forecasts that revenue from AI server products will double in Q2, driven by booming global demand. It’s also expanding into electric vehicle assembly and semiconductor manufacturing, underscoring its push to become a key player across emerging tech sectors.

Neil Shah, VP at Counterpoint Research, told CNBC:

“With the AI infrastructure boom, Hon Hai’s alliance with TECO strengthens its entire server component and infrastructure value chain. It aims to become the go-to provider for complete data center needs.”

Challenging Industry Giants and Tapping Global Demand

Foxconn’s entry places it in competition with established players such as Siemens, ABB, and Mitsubishi Electric. But the massive demand gives room for disruption — tech titans like Microsoft, Google, and Meta are projected to pour billions into expanding their AI data center footprints this year alone.

Foxconn and TECO are targeting key markets not just in Taiwan but also across Asia, the Middle East, and the United States. Their focus on the U.S. includes plans to expand local manufacturing, which could help align with reshoring and supply chain resilience goals.

“The full data center solutions will drive Foxconn’s expansion into the broader CAPEX landscape, including both servers and physical infrastructure,” Shah noted.

A New Era for Foxconn

Foxconn’s move into AI infrastructure marks a transformative shift in its business strategy. By partnering with TECO, the company is leveraging its core manufacturing capabilities while positioning itself at the center of the AI data revolution. As global capital flows into data centers and digital infrastructure, Foxconn is no longer just a consumer electronics assembler — it’s becoming a foundational player in the next wave of intelligent computing.