Datacenter Growth Influence in EMS Manufacturing Industry
Grow and consolidate. This trend has been ongoing in the datacenter, hyper-connectivity space for a few years and now its heating up. Cloud computing services like Google Cloud, AWS and Azure each have a premium markup for using their compute (GPU). These services are charging anywhere between $4 and $30 per hour for different levels/size servers, whereas other competitors are charging $2 per hour. Meanwhile, Oracle is trying to attract anyone because they have huge data centers with massive cloud computing capacity.
This ongoing, increasing demand and activity in cloud computing is also driving further growth in the cloud for contract electronics manufacturing services (EMS) industry.
This growth and consolidation driven by increased demands in hyperconnectivity and edge computing industry is constantly dealing with thermal compute issues whether its in the embedded side of the business of final systems integration performance.
One good indicator for the datacenter space is Supermicro. The company has manufacturing operations in Silicon Valley, the Netherlands and at the Science and Technology Park in Taiwan. Supermicro is among the top three or four companies for all computing.
Late last year, Supermicro announced the company is ramping up its global manufacturing footprint, increasing worldwide capacity to 5,000 fully tested AI, HPC, and liquid cooling rack solutions per month.
Supermicro is shipping racks. To put 5,000 racks into perspective, server companies like HP or Dell ship U's - individual 1U and 2U servers. Meanwhile, edge computing (networking) devices are turning telecom industry into a low-margin business.
And while electronics OEM equipment firms are trying to push as much compute to the edge as possible, EMS manufacturers are taking note and stepping up with new processes and technology and capacity capabilities to serve cloud computing customers.
EMS Factories for Datacenter Manufacturing
Optical equipment manufacturing expertise is in high demand for EMS providers with focus on craftsmanship in optics: splicing and building sophisticated optics equipment.
EMS customers in the networking sector have been leaving China and moving to Mexico so factories are becoming filled, new factories are being built, and the lines for OEM equipment prospects to get in can be long. But, if OEM first-year revenue is greater than $20 million per year then you are automatically placed in a different group of potential customers.
At this point, some OEMs are avoiding Guadalajara factory locations with providers like Flex and Sanmina and looking to Monterey, instead, depending on services needed. Penang and Thailand are also options with good capabilities, depending which criteria you are using when creating your EMS providers short list. Equipment firms seeking EMS providers can obtain a short list of provider matching your requirements here.
