Hon Hai's US$142 Million Texas Investment: Fueling the AI Server Revolution

Foxconn's Expansion in the US Signals a Major Play in the Booming AI Server Market.

Taipei, Taiwan – Hon Hai Precision Industry Co., the Taiwanese manufacturing powerhouse, is making a significant move in the burgeoning artificial intelligence server market. The company has announced a US$142 million investment in Texas, signaling a strategic expansion of its AI server production capabilities.

In a filing with the Taiwan Stock Exchange (TWSE), Hon Hai revealed that its cloud solution subsidiary, Ingrasys Technology Inc., has acquired an 86.34-acre lot and a 1 million square feet building in Houston. While the company, globally recognized as Foxconn, has not explicitly stated the investment's purpose, industrial sources familiar with the deal indicate it's geared towards increasing AI server capacity, initially for clients in North America (excluding Apple Inc.).

This follows Apple's late February announcement of a partnership with Hon Hai to construct an AI server assembly plant in Houston, slated for completion by 2026. Products from this 250,000-square-foot facility will be used to support Apple's data centers.

Prior to the Texas investment, Ingrasys Technology had already secured a building and land in Sunnyvale, California, for US$128 million, also aimed at enhancing AI server capacity, according to industry sources.

Hon Hai is actively expanding its AI server capabilities across multiple locations, including Taiwan, the United States, Mexico, and Vietnam, to provide flexibility in adjusting high-end AI server production based on market demands.

At a recent investor conference on March 14th, Hon Hai projected AI server sales to exceed NT$1 trillion (US$30.30 billion) in 2025, fueled by the soaring demand for AI. The company, the world's largest contract electronics manufacturer, anticipates that AI servers will constitute 50% of its total server revenue this year, capturing over 40% of the global AI server market share.

Last year, Hon Hai achieved record consolidated sales of NT$6.86 trillion, an 11% increase from the previous year.

Hon Hai's investment journey began in the U.S. in 1985, later expanding to China in 1988. The company has since invested in 24 countries, operating 233 facilities worldwide.

According to Hon Hai Chairman Young Liu (劉揚偉), the company invested over NT$340 billion in capital expenditure to expand global production from 2022 to 2024. This worldwide expansion is intended to build resilience against potential US tariff threats.