The agreement will tie Foxconn's iPhone building expertise with HP's tech know-how.
HP has signed a joint venture deal with Taiwanese firm Foxconn to build low-cost cloud-optimised servers aimed at service providers.
The agreement will leverage Foxconn's large-scale manufacturing expertise behind Apple's iPhone and HP's computer know-how and service support.
Both the companies said that the venture will bring together cloud solution expertise, quick customer response and volume manufacturing as changing needs require a newer approach to server design.
The companies claim that the new line of servers will offer low total cost of ownership (TCO), scale, and better service and support.
HP president and chief executive Meg Whitman said with the relentless demands for compute capabilities, customers and partners are rapidly moving to a new style of IT that requires focused, scalable and high-volume system designs.
"This partnership reflects business model innovation in our server business, where the high-volume design and manufacturing expertise of Foxconn, combined with the compute and service leadership of HP, will enable us to deliver a game-changing offering in infrastructure economics," Whitman said.
Complementing HP's existing range of ProLiant servers including Moonshot, the new range of servers will be easy to manage, Whitman added.
Foxconn founder and chairman Terry Gou said: "In partnership with HP's server leadership, we are embracing this new opportunity to change the industry, capture growth in this emerging market, and deliver end-to-end value as we expand our global leadership in design and manufacturing."agr