Hon Hai: US Capex for Data Center To Start at $1-5 Billion

Bloomberg

Watch Hon Hai: US Capex for Data Center To Start at $1-5 Billion - Bloomberg on Dailymotion

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00:00What about in terms of the compute capacity, talk about it in gigawatts then.

00:04A gigawatt per week would be the goal.

00:07Okay, one gigawatt per week?

00:09One per week, that would be the same goal.

00:11But we can start with one gigawatt per month.

00:15So you think you can add one gigawatt per month next year?

00:19That's starting next, the second half of the year.

00:24Second half of the year, so you think you can add six gigawatts next year?

00:28I'm not sure. It really depends on our study and our new way of doing things.

00:33It takes time, but eventually we're going to get there.

00:37Let's talk about then this opportunity in the U.S.

00:40Because as you said, the part of this is about making America.

00:43It's very ambitious.

00:45What's the capex that you need to also dedicate to the states?

00:50The capex-wise, it's in maybe one to five billion to start with.

00:57To build the factories, to build R&D centers.

01:01But to build the working capital required to build data center, that's totally different.

01:11That requires huge amount of money.

01:15And with that, we are going to work with SolBank.

01:20Getting back to that one to five billion dollar capex in the U.S.,

01:24what sort of timeline is that spread over?

01:27We want to happen as soon as possible.

01:30And how are you going to finance that?

01:33FastCon itself is able to finance that.

01:36What are the biggest challenges with scaling up in the U.S.?

01:41Shortage of labor.

01:43As I mentioned, it's not the labor cost. It's a shortage of labor.

01:47Shortage of labor.

01:48How do you get around that?

01:49What are the conversations like?

01:51And what are the biggest shortfalls that you see?

01:54We have to work closely with schools and the government,

01:59which we were very familiar with when we build factories all over the world.

02:06We have to work with local agencies or local governments

02:11to get their people ready for the kind of job that we require.

02:17On the AI server production assembly side,

02:20because today you made that point that you're at a thousand units a week.

02:26A thousand racks.

02:27A thousand racks rather.

02:28Yeah, you're assembling it.

02:29You can assemble a thousand server racks per week right now.

02:33Next year, what does that look like in terms of your target?

02:37I would say more than 50% of the increase up to 1,500 to 2,000 racks.

02:50You think you can double it? That's within sight.

02:53Are the data centers ready though?

02:55Is the financing in place?

02:57The power.

02:58The power.

02:59Yeah, exactly.

03:00I think the critical thing is the power.

03:01I think all the data center users, they're all trying to secure power.

03:10right?

03:11So we found some progress there for our data center users to secure the power.

03:24Because I'm running a data center.

03:27The data center users will be the one who can use the data center.

03:32So they have more say than us to work with the government for the power.

03:44Because they're the one who can commit.

03:46Not us.

03:47You know what I mean?

03:48So they will, you know, I think they have a way to work it out.

03:52Their conversations to have.

03:53Yes.

03:54Yes.

03:55If your US factories are going to be highly automated, or they are highly automated, can

03:59be, do you see then moving other types of production to the US, consumer electronics

04:05and then specifically smartphones, could you shift some production there?

04:08Oh, it's totally different game.

04:10Because for, as I mentioned, for the servers, their unit cost is so high.

04:17The labor cost, comparing to it, is a small percentage, right?

04:22But for smartphones, the unit cost, you know, five, six hundred dollars.

04:30So, the labor cost, and also, you know, the number of units, much higher, as I mentioned

04:39to you, one million phones a day, right?

04:43If it's one dollar more, that means one million.

04:47Gone.

04:48Yes.

04:49So, this is a totally different game.

04:51But I think once we have some kind of infrastructure built in the states locally, that infrastructure,

04:59the cost of the infrastructure will become a leverage for other products to come.

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