New alliance boosts Foxconn's role in AI super-computing

21 News is working to find out if the former General Motors Assembly Plant in Lordstown will play any part in Foxconn’s plans to expand its move into the fast-growing world of artificial intelligence. We learned early Wednesday why Foxconn and TECO Electric & Machinery Co. both suspended trading of their stocks.

The trading halt occurred when two major Taiwanese technology companies, Foxconn and TECO Electric & Machinery Co. Ltd., announced they were joining forces.

The goal of the partnership is to become a bigger player in building the special computer systems needed for artificial intelligence (AI) and the massive computer "data centers" that support them, according to a joint news release from the companies.

The deal combines the strengths of Foxconn, which is the world’s largest maker of electronics and AI servers, with TECO, a leader in industrial engineering and green energy. Together, they plan to offer complete solutions for building AI data centers, including everything from the parts inside the computers to the power systems that run them.

As part of the deal, which doesn't involve cash, TECO will get a small piece of Foxconn, about 0.519%. In exchange, Foxconn will own 10% of TECO. This means TECO will give Foxconn over 237 million new shares, and Foxconn will give TECO over 72 million new shares. Both companies' boards have approved the deal, which they hope to finish by the end of this year, after getting government approvals.

Foxconn Chairman Young Liu said that being quick to market is "key in the global super-computing race." He explained that as AI data centers get bigger and more people need them, working with TECO will help both companies quickly offer "complete, vertically integrated solutions" to their big customers, like cloud service providers.

TECO Chairman Morris Li added that changes in the world are creating new chances for businesses to work together. He said this partnership builds on their existing work in "low-carbon smart factories and energy services" to become a "one-stop solution for data centers."

In addition to the United States, the companies said they plan to focus on markets in Taiwan, Asia, and the Middle East. They highlighted that TECO-Westinghouse, a company in Texas known for making electric motors, along with Foxconn's current manufacturing locations in the U.S., will help them grow their American manufacturing and change how global supply chains work. Besides Lordstown, Foxconn has other facilities in the U.S., including in Wisconsin, Virginia, Indiana, and several in Houston, Texas.

The joint press release from the companies comes after 21 News reported Monday that a Foxconn Ohio spokesperson had hinted at an upcoming announcement. In Taiwan, companies often halt trading of their stocks before big news like investments or mergers that could affect stock prices.

Foxconn Ohio bought the former General Motors plant in Lordstown from electric vehicle maker Lordstown Motors after GM closed it in 2019.

Foxconn is also working with a German company on a special operating system for electric vehicles that uses AI. They are currently waiting for the U.S. Environmental Protection Agency (EPA) to approve a permit by Aug. 2, which would allow them to install equipment for stamping, assembling, and finishing electric cars at the Lordstown plant.

Trading of Foxconn's shares on the Taiwan Stock Exchange was expected to restart after the announcement.