- SoftBank has reportedly purchased Foxconn's Ohio manufacturing plant
- It plans to use the facility to make servers for the U.S. Stargate project it is pursuing with OpenAI and Oracle
- Foxconn will continue to operate the facility on SoftBank's behalf
SoftBank is apparently looking to put a bit of domestic muscle behind the U.S. Stargate project it is pursuing alongside OpenAI and Oracle. The company just dropped a cool $375 million to buy a manufacturing facility in Ohio from Taiwanese production titan Foxconn, which will continue to operate the facility on SoftBank’s behalf. But will its big bet pay off?
To be clear, there are several pros to the deal from SoftBank’s perspective. As AvidThink Founder and Principal Roy Chua explained, “it helps create increased reliability in the supply chain so that the [server manufacturing] capacity is all directed to Stargate.”
Chua added that the deal also secures a facility capable of building custom hardware for Stargate should OpenAI, Oracle and SoftBank deem it necessary to do so.
To understand why the deal could potentially be risky for SoftBank, you have to understand a few things about the way Foxconn operates.
How Foxconn operates
The company is a well-known contract manufacturer, particularly in the consumer electronics space, having notably been the partner responsible for putting together Apple’s iPhones. So it doesn’t make its own hardware so much as it assembles third party designs.
Thanks to AI, Foxconn’s server manufacturing business has recently picked up a LOT of steam, posting 60% growth in Q2 2025. The company said it expects year-on-year growth to hit 170% in Q3, with rack shipments growing threefold sequentially.
In light of all this demand and the apparent money it is making, it’s fair to ask why Foxconn would sell its Ohio plant to SoftBank.
The answer, according to J. Gold Associates Principal Jack Gold, is that Foxconn’s Ohio plant probably wasn’t making enough of a profit. SoftBank’s investment means it is assuming the financial risk attached to the facility while Foxconn will get paid for running the plant.
That’s a win for Foxconn, but whether or not it will be a win for SoftBank comes down to whether or not enough orders come in to fill the factory’s capacity.
“The question becomes can they fill it with enough orders from this project to make it worthwhile? Is Stargate going to fill that factory? I don’t know and I don’t think anybody right now knows the answer to that,” Gold told Fierce.
Gold said it’s completely possible that SoftBank will offer some of its manufacturing capacity to Stargate partner Oracle and other hyperscalers who may need AI servers made in the U.S. for other projects. But if the AI bubble bursts and orders dissipate, SoftBank could be left in the lurch.
The political angle to the deal
There’s also an interesting political angle to what SoftBank is doing. The company seems to be trying to play it smart to both circumvent tariffs and fall in line with the Trump administration’s domestic manufacturing push. That’s not necessarily a surprise given SoftBank CEO Masayoshi Son’s previous commitments to working with President Trump and investing in the U.S.
But given the administration’s recent criticism of Intel CEO Lip-Bu Tan’s foreign investments, it’s worth wondering whether the involvement of Taiwan-based Foxconn in making critical AI infrastructure will be subject to similar scrutiny.
Why take the risk? “They could have gone to [U.S.-based] HPE or Supermicro, but that increases the price and those factories are probably full anyway,” Gold concluded.