Super Micro Computer Expands US Production to Meet Surging AI Server Demand
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Supermicro Eyes Texas, Mississippi For AI Server Growth As Microsoft, Amazon Increase Spending - Super Micro Computer (NASDAQ:SMCI)
Super Micro Computer SMCI plans to expand its server production capacity in U.S. states such as Mississippi and Texas. Big Tech giants Microsoft Corp MSFT and Amazon.com Inc AMZN spend big bucks to build data centers to train and deploy artificial intelligence models globally. The company said it also got a boost from President Trump's push for localization. Also Read: Super Micro Impacted By AI Server Delays And Nvidia Supply Limits, Analysts Lower Forecast The AI server company's Chair and Chief, Charles Liang, backed the company's expansion by describing the surge in the global demand for artificial intelligence in an interview with the Wall Street Journal on Monday. Liang recognized growth opportunities in the U.S., Europe, and Japan. In February, Super Micro Computer showcased plans to build its third campus in San Jose. Liang said the company was eyeing manufacturing in Texas and Mississippi as costs in Silicon Valley rise. Super Micro Computer makes the bulk of its servers in California. Super Micro Computer stock declined over 52% in the last 12 months as the company's internal financing controls came under scrutiny after its independent auditor resigned last October over governance and transparency concerns, which led the company to delay filing its quarterly and full-year results. Delayed orders of servers and other computer products due to tariff uncertainties prompted the company to cut its outlook. Super Micro Computer now expects fiscal year sales of $21.8 billion -- $22.6 billion, down from a prior outlook of $23.5 billion -- $25 billion. Liang acknowledged production challenges in the U.S., including higher costs and a three-decade-old lack of a semiconductor production system, which made its infrastructure and people unfamiliar with manufacturing jobs. Raymond James initiated coverage on Super Micro Computer, citing AI platforms constitute approximately 70% of Supermicro's revenue, positioning it as a dominant player among branded server vendors. Price Action: SMCI shares were trading higher by 1.19% to $43.28 premarket at last check Wednesday. Read Next: Nvidia Unveils AI Tools For Humanoid Robots, Launches Quantum-AI Supercomputer To Drive Next Tech Era Photo by JHVEPhoto via Shutterstock SMCISuper Micro Computer Inc$43.511.73%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum48.64Growth88.68Quality95.00Value65.01Price TrendShortMediumLongOverviewAMZNAmazon.com Inc$201.93-1.05%MSFTMicrosoft Corp$454.64-0.77%Market News and Data brought to you by Benzinga APIs
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Super Micro Computer eyes U.S. expansion amid rising AI demand - WSJ By Investing.com
Investing.com -- Super Micro Computer (NASDAQ:SMCI), a San Jose, California-based server manufacturer, is planning to increase its production capacity in the U.S. to meet the growing global demand for artificial intelligence (AI), according to a report from the Wall Street Journal late on Tuesday, citing an interview on Monday with the company's CEO. Charles Liang, CEO and chairman of Super Micro Computer, revealed the interview that the demand for AI is growing rapidly, presenting numerous opportunities for growth in the U.S., Europe, and Japan. Liang mentioned that the company is considering expanding its production to states such as Mississippi and Texas, particularly if the current U.S. administration continues to promote localization. Super Micro Computer, a supplier of servers utilized for generative AI, announced plans in February to construct its third campus in San Jose. Liang noted that the company is considering manufacturing in Texas and Mississippi due to the rising costs in Silicon Valley. The majority of Super Micro's servers are currently produced in California. The company's expansion plans come as it seeks to capitalize on the global AI boom.
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Super Micro Computer plans to expand its server production capacity in Mississippi and Texas to meet the growing global demand for AI servers, driven by increased spending from tech giants like Microsoft and Amazon.
Super Micro Computer's Expansion Plans
Super Micro Computer (NASDAQ:SMCI), a leading server manufacturer based in San Jose, California, is setting its sights on expanding its production capacity in the United States. The company is eyeing states such as Mississippi and Texas for potential growth, driven by the surging global demand for artificial intelligence (AI) servers 1.
Source: Benzinga
Charles Liang, Chair and Chief Executive Officer of Super Micro Computer, highlighted the rapid growth in AI demand during an interview with the Wall Street Journal. He emphasized the numerous opportunities for expansion not only in the U.S. but also in Europe and Japan 2.
Driving Forces Behind the Expansion
The company's expansion plans are fueled by several key factors:
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Increased Spending by Tech Giants: Major technology companies like Microsoft Corp (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN) are investing heavily in building data centers to train and deploy AI models globally 1.
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Government Support: The push for localization by the current U.S. administration has provided an additional boost to Super Micro Computer's expansion efforts 1.
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Rising Costs in Silicon Valley: As expenses in the traditional tech hub increase, the company is looking at more cost-effective locations for manufacturing 1.
Challenges and Considerations
Despite the promising outlook, Super Micro Computer faces several challenges:
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Production Hurdles: Liang acknowledged the difficulties of manufacturing in the U.S., including higher costs and a lack of a well-established semiconductor production system 1.
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Internal Control Issues: The company's stock has declined over 52% in the past year due to scrutiny of its internal financing controls, following the resignation of its independent auditor over governance and transparency concerns 1.
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Revised Financial Outlook: Super Micro Computer has adjusted its fiscal year sales expectations downward to $21.8 billion - $22.6 billion from the previous $23.5 billion - $25 billion forecast 1.
Market Position and Future Prospects
Despite these challenges, Super Micro Computer remains a significant player in the AI server market:
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AI Revenue Dominance: Raymond James initiated coverage on the company, noting that AI platforms constitute approximately 70% of Supermicro's revenue, positioning it as a leading player among branded server vendors 1.
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Expansion of Production Facilities: In February, Super Micro Computer announced plans to build its third campus in San Jose, demonstrating its commitment to growth 2.
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Global Market Opportunities: Liang sees potential for expansion not only in the U.S. but also in Europe and Japan, indicating a broad international strategy for capitalizing on the AI boom 2.
As the demand for AI continues to grow rapidly, Super Micro Computer's expansion plans reflect the company's ambition to solidify its position in the competitive server manufacturing landscape, particularly in the burgeoning field of artificial intelligence infrastructure.
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