Foxconn, a major contract manufacturing giant, recently announced that it will sell its electric vehicle factory located in Ohio, USA, and transform the site into a production base for AI servers. This news was disclosed in a Monday announcement by the company, which stated that although it will continue to operate and conduct other activities in the region, the sluggish demand in the electric vehicle market has prompted them to make this decision.
According to Japanese media "Nikkei," Foxconn believes that the North American electric vehicle market is currently facing overcapacity, leading to demand not meeting expectations. In stark contrast, the demand for AI servers is on the rise, so Foxconn aims to enhance its production capacity in the United States to meet the market demand in this field. Additionally, The Wall Street Journal also reported the news that this factory will shift to server production.
This announcement of selling the factory comes shortly after Foxconn has reached a strategic partnership agreement with TECO Motor Company. The two companies plan to jointly develop global AI data center businesses. TECO will provide the energy infrastructure needed to build data centers, while Foxconn will produce servers and other data center hardware according to customer needs.
Foxconn has committed to expanding its business in the United States to manufacture AI hardware for local customers such as Apple. Shifting the Ohio factory from electric vehicle production to AI production is clearly an important step for Foxconn's development in the AI field. However, Foxconn had previously committed to establishing an electric vehicle reference platform to win orders from automakers, and the future direction of this plan remains unclear. Foxconn has had previous examples of abandoning large-scale projects, such as failing to establish a large LCD display manufacturing plant in Wisconsin as planned.
The popularity of the LCD display market has declined, and Foxconn's current transformation is closely related to the policy of the Trump administration promoting foreign enterprises to produce in the United States. At the same time, the government also eliminated tax credit policies for purchasing electric vehicles and announced a relaxed regulatory policy on AI, aiming to stimulate the construction of data centers.
Notably, on the same day that Foxconn announced its transformation, Tesla's board also announced that it granted CEO Elon Musk 96 million shares of temporary rewards, worth approximately $2.9 billion. In a letter to shareholders, the board stated, "Retaining Elon is more important than ever," as Tesla is transitioning from the electric vehicle and renewable energy industries toward becoming a leader in AI, robotics, and related services.
Key Points:
🌟 Foxconn is selling its electric vehicle factory and plans to convert it into a production base for AI servers.
📉 The North American electric vehicle market is facing overcapacity, and Foxconn is adjusting its strategy to adapt to new market demands.
🤝 Foxconn is collaborating with TECO Motor to jointly develop AI data center businesses, further expanding its business scope.