Contract electronics maker Compal Electronics Inc (仁寶) said its board has approved the construction of its first server manufacturing plants in the US through its wholly owned subsidiary, Compal USA Technology Inc (CUT).
CUT is to lease a plant facility outside Austin, Texas, for US$65.67 million for server production, the company said in a statement on Thursday.
It would also invest US$28.43 million to lease a separate facility nearby to establish a center for after-sales and maintenance services to support corporate and cloud service infrastructure demand, it said.
Photo: CNA
The company’s new plant in Taylor, Texas, would focus on server rack assembly, with construction expected to be completed by the middle of next year, readying for volume production in the second half of next year, a Compal official said in an interview.
The new US operation could become a major growth driver next year as Compal did not offer server rack assembly services before, the official said.
In the US, Compal mostly produces automotive electronic components at plants in Indiana as well as in Reynosa, Mexico.
Compal would consider shifting some of its server motherboard assembly to the new US plant, depending on demand, the official said.
Most of Compal’s server motherboard production is based in Taiwan and Vietnam, the official said.
Compal’s latest expansion in the US aims to meet the needs of its US clients and respond to the “Made in America” manufacturing trend prompted by US tariffs, the official said.
The move is also intended to mitigate potential risks arising from the uncertain outcome of a Section 232 investigation under the US Trade Expansion Act, the company said.
Compal expects most component supplies for its US plants to come from imports in the short term, but plans to localize its supply chain by cooperating with local component suppliers in the long term, it said.
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