Here & Now Extra: Under its revised tax incentives contract with the state, the global electronics giant proposes to manufacture products essential to conducting business and living life in “the cloud.”
Foxconn struck a new economic development deal with Wisconsin, but what exactly the Taiwan-based manufacturer plans to produce in the state remains a mystery.
In April, the Wisconsin Economic Development Corporation signed off on a majorly scaled-down tax incentive package for Foxconn. The amended contract comes less than three years after the company broke ground on a much-hyped campus in Racine County where it originally promised to build large LCD screens.
Those plans did not come to fruition. At the same time, Foxconn officials have become more circumspect about their plans for Wisconsin. In a statement lauding its revised contract with the state, the company stated the terms were “based on Foxconn’s current projections for digital infrastructure hardware products through 2025.” It didn’t elaborate on what exactly those products might be.
What are “digital infrastructure hardware products,” and how could they fit into the global electronics manufacturer’s Wisconsin operations?
The latter question remains unanswered for the time being. Foxconn officials did not respond to multiple queries about its intentions, and a spokesperson for the Wisconsin Economic Development Corporation referred questions about any plans to the company.
Tom Still, president of the Wisconsin Technology Council, said he has been unable to verify whether Foxconn has landed a deal to assemble Google servers in Wisconsin, but that doesn’t mean such a deal doesn’t exist.
“It’s such a competitive business that I can imagine either side in those kinds of relationships would not want to talk openly about it,” Still said.
He added that server assembly, whether for Google or another customer, would certainly qualify as digital infrastructure hardware production.
Further, Still described digital infrastructure hardware as a broad and evolving term of art.
“It can touch everything from servers to motherboards to data center infrastructure, outward communications tools, cybersecurity and environmental mitigation,” Still said, noting a growing market 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 increasingly central to digital life, Still said the need for new data centers is expected to be strong well into the future. That means the market for high-end servers will likely remain strong too.
“There is a huge appetite for data centers here and elsewhere,” Still said, adding that he believes Wisconsin is an attractive place to site them.
“We don’t have earthquakes or hurricanes that take those things down,” he said. “We’ve got more reliable power … and I think we’ve got the technology infrastructure and the workforce in Wisconsin to help build them.”
Still and Ramanathan said the market for digital infrastructure hardware is likely to expand for years as more people gain access to the web through internet-connected devices. Investors agree, with a North Carolina-based capital management group forecasting that rising demand for “digital connectivity” will feed demand for data centers, cell towers and other digital infrastructure hardware.