Foxconn, SoftBank Focus on Data Centre Gear in Ohio for Stargate

Taiwanese tech giant Foxconn said on Monday it plans to make data centre equipment with Japan’s SoftBank at a former electric vehicle factory in Ohio.

The move is part of the massive Stargate project announced by President Trump shortly after he took office in late January. The $500-billion project aims to advance the US’s artificial intelligence infrastructure.

Softbank has purchased the Lordstown site, Foxconn chairman Young Liu told reporters, adding that Foxconn will continue operating the site via a venture the two companies will set up.

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Foxconn said earlier this month it had struck a deal to sell the factory and its machinery for $375 million, without naming the buyer.

Stargate is a joint venture between SoftBank, ChatGPT’s creator OpenAI and Oracle. SoftBank did not immediately respond to a request for comment.

Foxconn and SoftBank started preparatory work for the project more than half a year ago, Young added.

“We understand that for this project, the first priorities are power, venue, and timing — it cannot be delayed for too long. Taking all these factors into account, we believe Ohio is a very suitable location, and SoftBank shares this view,” he said.

Riding the data centre boom

Foxconn last week forecast a significant rise in third-quarter revenue. The world’s biggest iPhone maker said it had for the first time made more money from its AI server business than from smart electronics last quarter.

The company said artificial intelligence server revenue is expected to leap more than 170% year-on-year in the coming quarter, though it also warned of uncertainty from US tariffs.

Nvidia’s biggest server maker and Apple’s top iPhone assembler has been riding a data centre boom, as cloud computing firms such as Amazon, Microsoft and Alphabet’s Google spend billions of dollars to expand their AI infrastructure and research capacity.

Cloud and networking products, which include servers, accounted for 41% of its revenue in the second quarter, while smart consumer products represented 35%, the company said.

The contribution from the server business to its revenue is set to grow further in the current quarter, as Foxconn expects a slight decline in smart consumer electronics revenue. Some experts expect iPhone sales to slow after they surged in the June quarter ahead of the expected imposition of US tariffs.

“AI has been the primary growth driver so far this year,” Kathy Yang, rotating CEO of Foxconn, said on a call with media and analysts. But she warned that “close attention is needed due to the impact of changes in tariffs and exchange rates”.

The company said its capital spending would rise more than 20% this year, as it plans to boost server production capacity in its manufacturing sites in Texas and Wisconsin.

Global trade uncertainty and particularly the trade spat between the US and China could dim its outlook this year as it has a major manufacturing presence in China, though Washington and Beijing this week extended their tariff truce for another 90 days.

Foxconn said its goal of manufacturing its Model C EV for the US market remains unchanged, although initial production will take place in Taiwan.

Overall, the company, known formally Hon Hai Precision Industry, reported net profit for the April-June period of T$44.4 billion ($1.48 billion). Its shares have risen 8.4% so far this year.