TAIPEI, July 30, 2025 — TECO Electric & Machinery Co Ltd (“TECO”) (TWSE:1504) and Hon Hai Technology Group (“Foxconn”) (TWSE:2317) announced a strategic alliance today at a significant press conference held at the Taiwan Stock Exchange. This partnership, established through a board-approved share exchange, leverages TECO’s proficiency in electromechanical systems and Foxconn’s command of information and communications technology (ICT). The collaboration aims to capitalize on the global shift towards standardized and modular AI data center development, collectively pursuing extensive AI data center (AIDC) business prospects globally. Moving forward, the strategic alliance plans to investigate further cooperation across Foxconn’s ‘3+3+3’ key sectors.

Under the terms separately approved by both companies’ boards, TECO will acquire a 0.519% stake in Foxconn, while Foxconn will hold a 10% ownership in TECO. Specifically, TECO will issue 237,644,068 new shares to Foxconn, and Foxconn will issue 72,481,441 new shares to TECO, resulting in an approximate share exchange ratio of 1 to 0.305. This non-cash transaction is expected to finalize in the fourth quarter of the current year, pending necessary regulatory approvals.

Given that data centers primarily consist of in-room equipment (such as servers, cooling systems, and UPS) and external power infrastructure, this strategic alliance merges the collective strengths of both companies in AI servers, electromechanics, and information and communications. Key target markets include Taiwan, Asia, the Middle East, and the US.

TECO Chairman Morris Li stated, “Evolving global conditions are generating fresh opportunities for business and collaboration. This strategic partnership builds upon our existing cooperation in low-carbon smart factories and energy services, moving us towards becoming a comprehensive, single-source solution for data centers. Texas-based TECO-Westinghouse, a long-established global leader in electric motor manufacturing, benefits from its American production capabilities and localized services. When combined with Foxconn’s manufacturing operations in the United States, this aligns with both companies’ strategic objective to broaden American manufacturing and reconfigure global supply chains.”

Foxconn Chairman Young Liu commented, “Speed to market is crucial in the worldwide supercomputing competition. Modular design is becoming increasingly prevalent. With AI data centers expanding in scale and demand escalating, our collaboration with TECO enables both companies to enhance their capabilities and swiftly provide comprehensive, vertically-integrated solutions to our clients, including Tier-1 CSPs and hyperscalers.”

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