Supermicro looks to open second server assembly site in United States

(Reuters) - Data center server maker Super Micro Computer Inc is looking to open a new site in the United States to assemble computers, possibly in Oregon, the East Coast or Midwest, Chief Executive Officer Charles Liang told Reuters on Thursday.

Supermicro supplies servers to cloud computing companies, both designing and manufacturing its own machines. That puts it somewhere between companies like Hewlett-Packard Enterprise Co. that design systems but tap contract manufacturers to make them or manufacturers like Quanta Computer Inc that make machines designed by others.

Liang said in an interview that server assembly was currently almost evenly split between Supermicro facilities in Taiwan and company headquarters in San Jose, California, although the company maintains some operations in China to supply its Chinese customers.

He said Supermicro was examining expansion in Asia - “in Taiwan or another country,” without giving further details - and in the United States.

“We have been in San Jose for 27 years. I like the Bay Area a lot. However, when customers want high volumes, they do want a lower price,” he said. “We are looking for a second location, maybe in Oregon, or on the East Coast or in the Midwest.”

The company also plans to expand its operations in San Jose this year with a facility called Building 23 that will include 90,000 square feet (8,360 square metres) of production space and 118,000 square feet (10,960 square metres) of warehouse storage.

The moves come as Supermicro moves into the market for 5G networks, which are expected to use more data center-like equipment than previous networks. Liang said Supermicro was working with two telecommunications carriers in Europe, “two to three” in Asia, and was in talks with two in the United States, but declined to name them.

He said the 5G equipment could be made in the United States if customers requested it.

“Most 5G telecommunications customers are happy with our production combination - USA and Taiwan,” Liang said. “If a customer wants 100% done in the USA, we can do that, too.”

According to the most recent figures as of June 30, 2019, Supermicro had 3,670 full-time employees, including 2,281 in the San Jose facilities.

Reporting by Stephen Nellis in San Francisco; Editing by Peter Cooney