Inventec secures US$625 million syndicated loan for AI server development

Taipei, Oct. 21 (CNA) Inventec Corp., one of Taiwan's leading contract electronics makers, has secured a US$625 million syndicated loan to support the company's development of artificial intelligence servers.

In a statement released Monday, Inventec said it had signed an agreement with a consortium of banks for a syndicated loan to develop AI servers and other key technologies.

The company said the funding will help expand its global operations and enhance its competitiveness for long-term growth.

Inventec said that as AI technologies are growing very fast, global demand for AI servers, automotive electronics and telecom gadgets has been on the rise, adding the company expects its AI server shipments will grow significantly in the second half of this year.

According to Inventec, the loan is tied to ESG (environmental, social, and governance) initiatives through various indicators, including reductions in greenhouse gas emissions, increased use of renewable energy, improved waste management, and enhanced corporate evaluations, to fulfill its social responsibilities and achieve corporate sustainability.

The syndicated loan had previously been set at only US$500 million, but strong demand had the loan 1.5 times oversubscribed, paving the way to the final US$625 million, Inventec said.

Inventec said the Hua Nan Commercial Bank-led group of banks in the deal included Bank of Taiwan, Mega International Commercial Bank, First Commercial Bank, Cathay United Bank, Land Bank of Taiwan, Taiwan Cooperative Bank, Changhwa Commercial Bank, Bank of China, Taishin International Bank, China Construction Bank and E. Sun Commercial Bank.

In July, Inventec received a green light from the Ministry of Economic Affairs (MOEA) to invest US$85 million to build an AI server facility in the U.S. state of Texas as part of its efforts in global expansion. The Texas plant is expected to serve the company's American clients.

Over the weekend, Inventec announced that it has completed a deal to establish a joint venture with India's Dixon Technologies, under which the Taiwanese company will hold a 40 percent stake in the new entity -- Dixon IT Devices Private Ltd.-- and the Indian partner will hold the remaining 60 percent.

Inventec said the joint venture will roll out a wide range of products such as servers, notebook computers, desktop computers and electronic components.

Inventec President Tsai Chih-an (蔡枝安) said the new company will leverage the Taiwanese firm's engineering technologies, supply chain management, and system integration expertise, while utilizing Dixon Technologies' production capabilities to enhance operations.

Elsewhere, Inventec currently runs facilities in Mexico.