Foxconn is the leading manufacturer of electronics and semiconductors. Recently, they have taken steps to move away from the production of electric vehicles and focus on artificial intelligence (AI) servers. The Register believes that the pause in the automotive industry and the increase in AI server production is a great response to the current market. In this context, Tesla is also planning to revamp its artificial intelligence production. Read on to find out all the details.

Taiwanese contract manufacturing giant Foxconn

Taiwanese contract manufacturing giant Foxconn has sold its US electric vehicle factory and will use the land to create AI servers as a substitute.

A Monday filing presented the sale of the facility in Lordstown, Ohio, which Foxconn acquired from startup Lordstown Motors in 2022, and that the company will keep to operate on the site and get to other activities.

According to Japanese outlet Nikkei, Foxconn sold the plant as it feels the North American electric vehicle market is soft as production capacity exceeds demand, and the company wants to miliorates its capacity to manufacture AI servers in the USA. The Wall Street Journal also reported the change to server production at the Ohio site.

New of the sale: July 30 annoucement

News of the sale came just days after the July 30 announcement that Foxconn come into a strategic alliance with Taiwanese company TECO Electric & Machinery designed to aim the two companies pursue AI datacenter business worldwide.

TECO makes energy infrastructure required to build datacenters, and Foxconn makes not all its customers want, which is usually servers and other datacenter hardware.

Foxconn has already settled to increase its US presence so it can make AI hardware for Apple and other local customers. Flipping the Lordstown plant from EVs to AI therefore advances the Taiwanese company’s AI ambitions.

However, the company has also promised to build an electric vehicle reference platform so it can reach work from automakers.

The future of that plan is at this time not clear at all. But Foxconn has form walking away from big plans, as occured when it failed to deliver on a promise to build a giant LCD display manufacturing plant in Wisconsin.

Foxconn change: all you must know

LCD displays aren’t a popular market today. Foxconn’s modification is, nevertheless, very much in the same point with Trump administration policies that motivates foreign companies moving production to the USA and finished tax credits for buying electric vehicles. The administration also just presented a laissez faire AI policy thought to spark datacenter construction.

In addition, on Monday, EV-maker Tesla’s board announced the interim award of 96 million shares to CEO Elon Musk.

In a letter to shareholders the Board justified the award due to the fact of “Retaining Elon is more relevant than ever before” as the company shifts from being “a reference in the electric vehicle and renewable energy industries to increase towards turning into a leader in AI, robotics and related services.”

Foxconn agrees $375 million Lordstown plant sale to pivot towards data centers

Foxconn purchased the plant, a former General Motors (GM.N), opens new tab small-car factory named after the town in Ohio where it is located, in 2022 from now-bankrupt U.S. electric vehicle startup Lordstown Motors Corp for $230 million, as part of its efforts to expand into EVs.

Foxconn also invested in Lordstown and the companies started making electric pickup trucks there. But the partnership later soured, with Lordstown going out of business and suing Foxconn.

Foxconn said on Monday it sold the factory to an “existing business partner”, without giving details.

It also said the company remained committed to automotive customers in the U.S. and said it would be able to rapidly ramp up automotive production to meet customer demand when required.