Foxconn Technology Group will acquire a 10% stake in TECO Electric & Machinery through a stock swap valued at NT$12.43 billion ($390 million), marking the iPhone assembler’s first major Taiwanese partnership as it expands beyond consumer electronics into artificial intelligence infrastructure.
The deal, announced Wednesday after both companies halted trading, sees TECO issue 237.6 million new shares to Foxconn in exchange for 72.5 million Foxconn shares. The 1-to-0.305 exchange ratio represents a 12.7% premium for Foxconn based on Tuesday’s closing prices of NT$171.5 ($5.36) and NT$46.4 ($1.45) respectively.
The partnership targets the global AI data center construction market, positioning both companies to compete for contracts in Taiwan, Asia, the Middle East and the United States. The alliance comes as the Trump administration’s Stargate project promises $500 billion in AI infrastructure investment over four years, creating significant opportunities for equipment suppliers.
TECO, founded in 1956 as a motor manufacturer, brings electrical engineering expertise and its Texas-based TECO-Westinghouse subsidiary to complement Foxconn’s server assembly capabilities. The company generated $1.72 billion in trailing revenue and has been expanding its data center mechanical and electrical contracting business, recently securing projects in Malaysia.
However, the stock swap reflects the speculative nature of AI infrastructure demand, with Foxconn paying a substantial premium for access to TECO’s traditional industrial capabilities in an increasingly crowded market. The transaction requires regulatory approval and is expected to complete in the fourth quarter.
