Foxconn amended its contract with the Wisconsin Economic Development Corp. for the second time, with the modified deal providing up to $16 million in additional performance-based tax incentives, according to the regional agency’s press release.

Under the modified contract, Foxconn pledged to create 2,616 jobs and make a total of $1.2 billion in capital investments through Dec. 31, 2029.

The Taiwan-based company initially announced in 2017 that it was establishing a manufacturing facility and committed to investing $10 billion and creating 13,000 jobs.

The facility opened in May 2021, but had remained idle since then, according to media reports. A month before the factory opening, Foxconn renegotiated its deal with the state down to a $672 million investment and only 1,454 jobs.

Then, in the summer of 2023, Microsoft paid Foxconn $50 million and bought a plot of land in Racine County, Wisconsin, to build a more than $1 billion data center, which has since surpassed $7 billion to build a second data center.

As of Dec. 31, 2024, Foxconn invested nearly $717 million in its Mount Pleasant campus and created 1,242 jobs, making the company qualified for $62.9 million in state tax credits, according to the Wisconsin Economic Development Corp.

The company expects to see “strong visibility” for AI data server demand over the next two years and plans to expand the facilities in Mount Pleasant as well as in Texas, Kathy Yang, rotating CEO at Hon Hai Technology Group, said during the company’s second quarter earnings call in August.

“We are continuing to expand in these locations, including adding AI server liquid-cooling testing capacity,” Yang said. “In addition, in California and at our Ohio campus, we will be adding capacity for cloud and networking products. Through these efforts, we aim to fully satisfy our customers’ growing demand.”

The latest investment comes about a week after the Apple component supplier announced a collaboration with OpenAI.

The two companies will focus on design work and U.S. manufacturing readiness for new AI infrastructure hardware, according to the Nov. 20 press release.

The deal entails OpenAI sharing insights into new and developing hardware needs across the AI industry. Foxconn will use that information to help design and develop hardware to be manufactured at the company’s U.S. facilities.

Additionally, the collaboration will help strengthen domestic supply chains across the United States and expedite the distribution of new AI systems. Foxconn will manufacture AI data center components, including cabling, networking, cooling, and power systems.

While the agreement does not include purchase commitments or financial obligations, OpenAI will instead have early access to assess the AI systems with an option buy the products, according to the company’s press release.

“As the demand for more data infrastructure continues to rise, Foxconn will keep responding to our customers’ needs with flexibility and at scale in the United States,” Jerry Hsiao, Foxconn’s chief product officer and general manager of Hon Hai USA, said in a statement Wednesday.

By: DocMemory
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