Foxconn, formally known as Hon Hai Precision Industry, is making a major move into the AI data center business. The company has unveiled strategic partnerships, modular infrastructure initiatives, and new supercomputing facilities—clearly signaling its ambition to become a one-stop provider in the AI infrastructure sector.
Foxconn’s New AI Data Center Strategy
Foxconn has entered a strategic share swap and alliance with TECO Electric & Machinery, aimed at delivering standardized, modular AI data center solutions on a global scale. TECO will take a 0.519% stake in Foxconn, while Foxconn acquires a 10% stake in TECO. This joint venture combines Foxconn’s AI server production capabilities with TECO’s electromechanical and infrastructure expertise.
According to Foxconn Chairman Young Liu, this partnership enables both firms to deliver comprehensive, vertically integrated solutions—from AI rack production to full facility construction—for Tier‑1 cloud providers and hyperscalers. The target markets include Taiwan, Asia, the Middle East, and the U.S.
AI Server Manufacturing: Foxconn’s Core Strength
Foxconn already controls over 40% of the global AI server market, and holds more than 70% share in GPU module and substrate production. The company expects AI servers to account for over 50% of its total server revenue in 2025, with sales estimated to exceed NT$1 trillion (about USD 33 billion)
This vertical integration—from system design to component sourcing—is central to its AI infrastructure ambitions.
The Taiwan AI Supercomputing Hub
During COMPUTEX 2025, Foxconn confirmed plans to build Taiwan’s first dedicated AI Factory supercomputing center, in collaboration with Nvidia, TSMC, and the Taiwanese government. The facility will be powered in phases, ultimately reaching 100 megawatts of power capacity, hosting Nvidia’s Blackwell and GB300-based computing infrastructure.
Foxconn has also formed a subsidiary—Big Innovation Company—as Taiwan’s first Nvidia Cloud Partner (NCP), reinforcing its commitment to hosting government, academic, and industrial AI workloads.
Sustainability and Market Growth Metrics
Foxconn’s fourth-quarter 2024 revenue hit NT$6.86 trillion (~USD 208 billion), driven significantly by AI server demand. It forecasts “significant growth” in 2025, with AI server sales expected to more than double and account for a growing share of overall revenue.
Meanwhile, Foxconn and TECO intend to deploy a modular architecture tailored for low-carbon smart infrastructure, aligning with global sustainability trends in data center construction.
What It Means for the Industry
1. One-Stop AI Data Center Ecosystem
Foxconn’s integration—from manufacturing AI servers to building full data center facilities—places it in direct competition with global systems integrators like Siemens, ABB, and Mitsubishi Electric.
2. Broader Market Access
With operations spanning Taiwan, Asia, the Middle East, and the U.S., Foxconn is positioning itself as a global AI infrastructure provider. Its U.S. footprint includes a planned $20 million facility via its subsidiary Ingrasys Technology in Texas, geared toward AI accelerator and server hardware production.
3. Risk and Regulatory Scrutiny
Despite strong momentum, Foxconn has revised its annual guidance due to macroeconomic and geopolitical pressures—including U.S. tariffs and currency fluctuations. Supply chain concerns and hardware export restrictions remain potential challenges.
✅ Summary Table
| Key Area | Details |
|---|---|
| Core Strength | ~40% global AI server market share |
| Partnership | Foxconn–TECO strategic alliance via share swap |
| New Infrastructure | AI supercomputing hub in Taiwan, modular AI data centers |
| Target Markets | Taiwan, Asia, Middle East, U.S. |
| 2025 Forecast | AI server revenue exceeds NT$1 trillion (~USD 33B) |
| Challenges | Tariffs, supply chain disruptions, political scrutiny |
