Large tech corporations are planning to invest billions of dollars in the construction of new data centers and manufacturing plants
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As everything becomes interconnected, the rate at which new data is generated has increased substantially. The need for advanced communication also means that the information must travel at a faster pace. All of these have resulted in an increasing demand for data centers over the last few years. Notably, having a robust data infrastructure has become an essential component for the growth of businesses. However, as the demand for data centers continued to grow, availability has gone down, which calls for the need to build new data centers. Consequently, large tech corporations are planning to invest billions of dollars in the construction of new data center facilities in the United States. For instance,
- In October 2022, Aligned Data Centers announced that the firm had purchased land in the Phoenix area, where it plans to build two data centers offering over 400MW of IT load. Notably, the plan to build data centers facility comes amid the growing demand from its client. Over the next few years, Aligned Data Centers expect Phoenix to emerge as a hotbed for data center services in the United States. The two planned sites in Phoenix are among the more than 470MW of construction projects that Aligned Data Centers has either active or planned to begin in 2022. Notably, the firm also announced a 36MW data center in Dallas.
- In July 2022, REIT, a Kansas-based firm that focuses on data centers, announced a 1.5 million square foot data center construction project in Richmond, Virginia. Notably, the construction project will bring additional capacity to its existing data center in White Oak Technology Park in Virginia. Similarly, in July 2022, Clark Construction Group announced the beginning of construction activities at the 24MW data center in Ashburn, Virginia. Notably, the firm is building the data center for the Japanese IT infrastructure and services firm, NTT. The 188,000-square-foot data center is projected to be completed in Q1 2024.
Along with the investment in data center construction activities, firms are also pouring billions of dollars into the construction of new manufacturing plants, which include semiconductor plants and electric vehicle facilities. In the United States, semiconductor projects are in high demand as more and more firms are pushing to onshore their manufacturing facilities. For instance,
- In July 2022, Samsung, South Korea-based consumer electronics firm, announced a US$191 billion semiconductor project in Texas, United States. Notably, the proposed construction project is 30 miles from Austin, Texas. The announcement of the new manufacturing plant comes amid the continuous push from the tech giant to gain and expand market share in the United States semiconductor industry. In June 2022, Samsung tapped Yates Construction, the Mississippi-based firm, to build the US$17 billion chip plant in Taylor, Texas.
- In July 2022, SkyWater Technology, a Minnesota-based firm, announced that it is planning to build a US$1.8 billion worth of semiconductor research and development and production facility in Indiana. Notably, the construction project is expected to be funded by the CHIPS Act, which includes a US$52 billion grant available to companies that manufacture semiconductor chips in the United States. Notably, Congress passed the CHIPS Act in July 2022.
- In July 2022, Panasonic, one of the leading global corporations, also announced a US$4 billion battery production facility construction project in Kansas. Notably, the new facility aims to further expand the capacity of the firm, which is looking to meet the rising electric vehicle demand. Panasonic is not the only firm expanding its EV battery production capacity. LG also announced its plans to expand the capacity of EV battery production in 2022.
Over the next few years, more than 13 EV battery manufacturing plants are expected to open in the United States. The funding from the Biden government has also pushed the construction of manufacturing plants. Notably, in May 2022, the United States government announced US$1.3 trillion in incentives for battery and component manufacturing through the Department of Energy.
While more such data center and manufacturing plants construction projects are expected to be announced by leading corporations in the United States, the materials and labor shortage problem is expected to threaten the construction activities of these major construction projects from the short-term perspective.
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