Hon Hai disposes of real estate, soil, equipment in Ohio
Foxconn Sells Ohio Plant for $375 Million, Shifts Focus to AI Data Centers and EV Production
Hon Hai Precision Industry Co (Foxconn Technology Group) has announced the sale of its Lordstown, Ohio plant for a total of $375 million to Crescent Dune LLC. The sale includes land, factory buildings, and machinery, with the plant covering about 599.6 acres and over 6 million square feet.
Despite the sale, Foxconn remains committed to its North American operations, particularly in the electric vehicle (EV) and AI data center sectors. The company expects to book NT$169.36 million (US$5.7 million) in disposal gains from the deal.
Foxconn's EV Strategy Remains Intact
The Lordstown plant has been the site of Foxconn's electric vehicle production, specifically for the Model C electric vehicle. However, the company is shifting towards an asset-light production model, signalling that the EV production strategy remains intact but more optimized.
AI Data Center Expansion
Simultaneously, Foxconn is strategically expanding its AI data center business in the U.S. to capitalize on growing demand for AI computing power. The company aims to lead in the AI server market by building on its EV industry foundation while focusing on AI data center development.
Foxconn plans to invest over $900 million in 2025 to grow its North American AI dominance. This includes co-developing advanced AI hardware with NVIDIA, expanding AI factories in Mexico and Taiwan, and capturing a large share (40%) of the global AI server market.
The partnership with Teco Electric and Machinery Co is a strategic move to tap into the global AI data center market. The companies expect to provide comprehensive data center modular products, electromechanical engineering services, and cost-competitive, one-stop solutions.
Looking Ahead
The sale of the Lordstown plant is expected to help Foxconn improve asset turnover efficiency and enhance its cash flow. However, the proceeds from the sale will not be immediately reinvested in Hon Hai's US operations, as the company has mentioned it will share more details about its US strategy in the coming months.
In summary, Foxconn's strategy reflects a pivot from heavy capital investment in EV manufacturing assets towards an asset-light model combined with aggressive investment and development in AI infrastructure, modular manufacturing, and regionalized production. The company aims to become a leader in both the EV and AI data center markets.
| Focus Area | Strategy Details | |---------------------|-----------------------------------------------------------------------------------------------------| | Lordstown Plant | Asset disposal to revitalize resources, optimize product portfolio and operations, sale generating gains | | EV Business | Continued development with asset-light production, maintaining Model C and modular platforms | | AI Data Center | Heavy investment and expansion, partnerships with NVIDIA and Teco, modular AI servers, market leadership ambition |
This dual-track U.S. approach aligns with evolving market demands and Foxconn’s long-term vision of converging AI, modular manufacturing, and sustainable EV production.
Foxconn plans to invest over $900 million in 2025, focusing on expanding its AI data center business in the U.S. and capturing a significant share of the global AI server market.
Simultaneously, Foxconn's EV strategy remains intact, with the company shifting towards an asset-light production model for electric vehicle production, including the Model C electric vehicle.
