Super Micro Computer Expands Production Amid AI Demand Surge
Super Micro Computer (NASDAQ:SMCI) is set to ramp up its server production capacity in Mississippi and Texas, responding to booming demand for artificial intelligence (AI) infrastructure from major tech players like Microsoft and Amazon. The company’s expansion aligns with ongoing efforts to localize production, an initiative bolstered by previous administrations.
In an interview with the Wall Street Journal, Chair and Chief Charles Liang emphasized the firm’s strategy to capitalize on the increasing global appetite for AI solutions. Recognizing growth potential in the U.S., Europe, and Japan, Super Micro plans to establish a third campus in San Jose while shifting focus to lower-cost manufacturing in southern states due to rising expenses in Silicon Valley.
Despite these ambitious plans, Super Micro has faced challenges, including a dramatic 52% decline in stock value over the past year. Internal financial issues and the resignation of its independent auditor last October fueled concerns over governance and transparency, resulting in the delays of quarterly and annual reports. Compounding these difficulties, the company has cut its fiscal year revenue forecasts to between $21.8 billion and $22.6 billion, down from prior estimates of $23.5 billion to $25 billion.
Liang acknowledged the challenges of manufacturing in the U.S., citing high costs and a long-standing lack of semiconductor production infrastructure, which has left local workers unfamiliar with manufacturing roles. Nevertheless, analysts note that AI platforms contribute approximately 70% to Super Micro’s revenue, solidifying its position as a prominent player among server vendors.
In recent trading, Super Micro shares showed a modest increase of 1.19%, reaching $43.28. As the company navigates these hurdles, its commitment to enhancing U.S. production could position it favorably in the evolving technology landscape.
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