Hon Hai subsidiary leases Taoyuan factory for NT$657 million

Taipei, July 3 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. announced Wednesday that its subsidiary, Ingrasys Technology, will invest NT$657 million (US$22.75 million) to lease a facility in the Farglory Free Trade Zone in Taoyuan for 60 months.

The deal covers the lease of eight floors in a factory on Hangxiang Road in Taoyuan's Dayuan District to meet the company's operational needs, according to a statement from Hon Hai.

The lease covers two sections: Floors 1 to 4, totaling 4,803.41 ping (about 15,875 square meters), and floors 5 to 8, totaling 5,042.76 ping (around 16,666 square meters)

The two sections will be leased at a monthly rate of NT$1,050 per ping.

Hon Hai already has operations in the free trade zone, while Ingrasys has been expanding its AI server production lines there as well as at facilities in Taoyuan's Luzhu District and Hsinchu's Hukou Township, according to industry sources.

Ingrasys has been aggressively expanding its operations. In late March, it announced a US$142 million investment via its U.S. subsidiary to acquire land and a factory in Houston, Texas.

Industry analysts believe the primary purpose of the Houston acquisition is to expand AI server production capacity.

In mid-January, Ingrasys' U.S. subsidiary also announced the acquisition of land and a facility in Sunnyvale, a major city in California's South Bay area.

Hon Hai previously said it is flexibly adjusting its high-end AI server production capacity across locations including Taiwan, the United States, Mexico and Vietnam.

Hon Hai estimates its AI server revenue will grow by more than 50 percent this year, with quarterly increases expected to push full-year revenue past NT$1 trillion.