H3C Technologies, a subsidiary of Tsinghua Unigroup and Hewlett Packard Enterprise (HPE), has taken a significant step in the global technology sector by forming a strategic alliance with Foxconn, the revered electronics contract manufacturer. This partnership sets the stage for a momentous undertaking: the construction of H3C’s maiden factory outside of China, situated in the heart of Malaysia.
Scheduled to commence operations in September 2024, the Malaysia facility marks the beginning of a wider international strategy, with additional H3C factories to be established in the United States, Mexico, and various European locations within the ensuing two to three years. This global expansion blueprint was announced by H3C’s President and CEO, Yingtao Yu, amid the activities of the 2024 Zhejiang-Taiwan Cooperation Week, solidifying their commitment to fostering ties and economic cohesion between the regions.
The collaboration between H3C and Foxconn transcends mere manufacturing – it is a partnership poised to infuse the Malaysian economy with state-of-the-art digital capabilities. H3C brings to the table a host of advanced technological services and solutions in artificial intelligence (AI), the Internet of Things (IoT), cloud computing, big data, and information security. These are critical components designed to propel Malaysia’s ambitious digital transformation journey, offering scalable, comprehensive resources to revitalize the nation’s digital infrastructure.
One of H3C’s key strategic initiatives in Malaysia has been the deployment of its UIS Hyper-converged Infrastructure across major hospitals. These advanced data centers are equipped with virtualization features for PACS/HIS systems, boosting medical imaging files’ management, access, and distribution processes. Such advances stand as a testament to H3C’s impact on digital transformation and the wider economic growth within Malaysia and the Southeast Asia region.
In parallel with the technological advancements, the partnership also signifies a bold investment move. Foxconn has secured an indirect influence over SilTerra, a semiconductor facility in Malaysia, through the procurement of a 5.03% stake in Dagang Nexchange Bhd (DNex), which holds a majority 60% share in SilTerra. This leads to control over an 8-inch wafer fabrication operation with a monthly output capacity of 40,000 wafers, emphasizing 28nm and 40nm process technologies.
Furthermore, Foxconn has witnessed an upsurge in its computing and artificial intelligence server businesses, largely due to its subsidiary Foxconn Industrial Internet (FII). The AI server segment now accounts for a substantial 30% of FII’s revenue – a figure expected to grow as cloud computing contributions are projected to reach 40% in 2024, and AI server market share aiming for 40% globally. FII has secured its position in the market by providing GPU modules, substrates, AI server design, and system integration for prominent clientele which includes tech giants such as Alibaba, Amazon, and Apple.
Signaling a firm grasp on the information technology market, Tsinghua Unigroup has further consolidated its position by acquiring a 30% stake in H3C for roughly $2.14 billion. This acquisition boosts its ownership to 81% and sparks the potential for H3C to become a completely integrated entity within Tsinghua Unigroup’s corporate portfolio. H3C touts a strong market presence in China, being the second-largest supplier of HPE servers, memory, and technical services, with industry-leading blade server market shares and a significant foothold in the GPU server market over recent years.
The synergy of H3C’s technological prowess and Foxconn’s manufacturing excellence creates a robust foundation for technological innovation and expansion that is poised to redefine data center investment and digital capacity in Malaysia and beyond.
