Hon Hai Precision Industry Co.’s subsidiary Q-Edge Corporation has secured usage rights to a Houston facility for NT$1.13 billion ($34.9 million), marking another step in the Taiwanese manufacturer’s costly American expansion.
The rental agreement covers 656,658 square feet of factory space through December 2032, according to a Taiwan Stock Exchange filing Monday. While Hon Hai cited operational needs without elaborating, analysts view the move as further evidence of the company’s determination to dominate U.S. AI server manufacturing.
The deal comes as Hon Hai, known globally as Foxconn, doubles down on artificial intelligence infrastructure despite questions about whether demand can justify the massive investments. The contract manufacturer has committed more than NT$340 billion in capital expenditure since 2022, with this year’s spending expected to grow over 20 percent.
Hon Hai’s first-half capital expenditure already reached NT$79.8 billion ($2.6 billion), up more than 25 percent year-over-year. The company has been particularly aggressive in Houston, where it has leased or purchased nearly 1.6 million square feet of industrial space over the past year.
Chairman Young Liu has positioned the company to capitalize on what he calls an AI revolution, with server revenue projected to exceed NT$1 trillion ($32.8 billion) in 2025. The company claims cloud service providers are expanding AI capital expenditure, validating long-term structural growth.
However, the rapid pace of facility acquisitions raises questions about whether Hon Hai is overextending itself in pursuit of AI opportunities that remain largely speculative. The company’s aggressive expansion comes as competition intensifies from Dell Technologies Inc., Hewlett Packard Enterprise Co., and Huawei Technologies Co.
The Houston facility addition follows similar moves across Mexico, Vietnam, and India as Hon Hai attempts to diversify beyond its traditional China-focused manufacturing base.
