Foxconn Plans To Make ‘Digital Infrastructure Hardware’ In Wisconsin – What Is It?
Foxconn has entered into a new economic development agreement with Wisconsin, but what the Taiwan-based manufacturer plans to produce in the state remains a mystery.
In April, the Wisconsin Economic Development Corporation signed a significantly reduced tax incentive program for Foxconn. The amended contract comes less than three years after the company opened on a popular campus in Racine County, where it initially pledged to build large LCD screens.
These plans were unsuccessful. At the same time, Foxconn officials have become more wary of their plans for Wisconsin. In a statement praising its revised contract with the state, the company said the terms were “based on Foxconn’s current projections for digital infrastructure hardware products through 2025.” He did not specify what exactly these products might be.
What are “digital infrastructure hardware products” and how might they fit into the operations of the global electronics maker in Wisconsin?
This last question remains unanswered for the moment. Foxconn officials did not answer multiple questions about its intentions, and a spokesperson for the Wisconsin Economic Development Corporation referred questions about any projects to the company.
Generally speaking, however, the term digital infrastructure hardware is used specifically in the fields of engineering and economic development.
Parmesh Ramanathan is a professor of electrical and computer engineering at the University of Wisconsin-Madison whose research focuses on improving wireless networks and power grids with new technologies. He said digital infrastructure hardware can include any number of products that support contemporary digital needs, which increasingly rely on internet-connected devices relaying information back and forth through vast collections. offsite servers called data centers.
Data centers form the backbone of what is commonly referred to as “the cloud”. Cloud computing is a major component of the digital infrastructure of the 21st century, with wireless networks and “smart” devices connected to the Internet, from phones to security cameras to refrigerators.
“When public policy makers talk about investments in digital infrastructure, they are usually talking about improving network connectivity or broadband connectivity,” Ramanathan said.
These investments require physical hardware, ranging from sensors installed on cell towers to servers at the heart of massive cloud computing data centers. Indeed, previous reports suggest Foxconn may be looking to assemble servers for cloud computing in Mount Pleasant.
A Bloomberg report from November 2020, citing “anonymous people familiar with the matter,” revealed that Foxconn had made a deal to assemble server components that Google will use in its cloud computing business. According to the report, assembly of the server components was scheduled to begin at Foxconn’s Mount Pleasant campus in the first quarter of 2021. However, neither Foxconn nor Alphabet, Google’s parent company, have publicly confirmed such. okay, and that remains uncertain. well into the second quarter of 2021 if this type of work takes place in Wisconsin.
In an April 30 interview on Here Now, Missy Hughes, secretary and CEO of the Wisconsin Economic Development Corporation, did not mention a specific contract between Foxconn and another company, but did describe operations in Mount Pleasant consistent with the server assembly.
“What they’re doing right now, what I’ve been able to see firsthand, is building high-tech data servers, and they’ve set up assembly lines to do that,” Hughes said. . “They’re building them for a number of different companies. And they’ll continue to be flexible and create other types of products for other companies and really use their expertise.”
Ramanathan described the types of servers Google uses in its cloud computing business as “high-end” pieces of digital infrastructure hardware, with the cost of an individual server running in the tens of thousands of dollars.
Tom Still, chairman of the Wisconsin Technology Council, said he had not been able to verify whether Foxconn had reached an agreement to assemble Google servers in Wisconsin, but that does not mean that such an agreement does not. does not exist.
“It’s such a competitive business that I can imagine that both parties in this kind of relationship wouldn’t want to talk about it openly,” Still said.
He added that the assembly of servers, whether for Google or for another customer, would certainly qualify as the production of digital infrastructure hardware.
Further, Still described digital infrastructure hardware as a broad and evolving art term.
“It can touch everything from servers and motherboards to data center infrastructure, outward communication tools, cybersecurity and environmental mitigation,” Still said, noting a market. growing for products that can reduce the environmental impact of data centers in particular. Server farms use huge amounts of electricity and water.
With cloud computing becoming more central to digital life, Still said the need for new data centers is expected to be great in the future. This means that the market for high-end servers is likely to remain just as strong.
“There is a huge appetite for data centers here and elsewhere,” Still said, adding that he thinks Wisconsin is an attractive place to locate them.
“We don’t have earthquakes or hurricanes destroying these things,” he said. “We have more reliable power… and I think we have the technology infrastructure and the Wisconsin workforce to help them build them.
Still and Ramanathan said the digital infrastructure hardware market is likely to grow for years to come as more people access the web through internet-connected devices. Investors agree, with North Carolina-based capital management group that predicts growing demand for “digital connectivity” will fuel demand for data centers, cell towers and other digital infrastructure hardware .
Whether or not Wisconsin attracts new data centers, Still described a more recent trend among US technology companies to “shift” or “reorient” parts of their supply chains to the United States. The COVID-19 pandemic has only accelerated the trend, he said. Foxconn’s Mount Pleasant facility could be well positioned to reap the benefits of this strategic shift, said Still, the server component assembly being part of the most mature digital infrastructure supply chain for the relocation.
Foxconn’s deep business connections in East Asia, where much of the world’s digital infrastructure hardware is currently manufactured, could also help it find the components it would need to assemble servers in Wisconsin, Wisconsin,. head with computer chips. The vast majority of silica-based computer chips are made in China. However, Still and Ramanathan considered that manufacturing chips from raw materials was unlikely to happen in Wisconsin, or the United States in general, on a large scale in the near future.
“It would be a huge investment,” Ramanathan said. “Hundreds of billions probably.”