Nvidia-partner Foxconn forms pact with Taiwan’s Teco for AI push
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Hon Hai, for years the largest manufacturer of electronics for iconic global brands, has tried to offset the impact of stalling smartphone sales.
PHOTO: AFP
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TAIPEI - Hon Hai Precision Industry formed a strategic alliance with Teco Electric and Machinery, a pact that should help the iPhone-assembler advance its push into artificial intelligence hardware.
The Nvidia and Apple manufacturing partner will take a 10 per cent stake in its smaller Taiwanese peer, which will in turn obtain a holding of less than one per cent in Hon Hai, the companies said in a joint media briefing in Taipei on July 30.
Each company will issue new shares to execute the swap.
The deal underscores Hon Hai’s ambitions to venture beyond iPhones – which make up much of its revenue now – and into adjacent fields such as AI infrastructure and electric vehicle production.
The companies said the pact will focus on areas such as AI servers and other AI data-centre hardware.
Hon Hai, for years the largest manufacturer of electronics for iconic global brands, has tried to offset the impact of stalling smartphone sales.
In May, it reached a deal to supply Mitsubishi Motors with an electric vehicle that will be manufactured in Taiwan and sold in Australia and New Zealand by the end of 2026.
The Taiwanese company is also relying on the AI boom to propel growth, and has been adding investments in the US to build AI servers. It is partnering with Apple and Nvidia for its US expansion.
Shares of the company commonly known as Foxconn, as well as those of Teco, were suspended from trading ahead of the disclosure. They are set to resume trading on July 31. BLOOMBERG
