Super Micro Computer (SMCI) Plans to Grow Its U.S. Manufacturing Base

Server maker Super Micro Computer (SMCI) says it is considering growing its domestic manufacturing operations within the U.S.

In a media interview, Super Micro Computer CEO Charles Liang said the company is giving serious consideration to expanding its production in states such as Mississippi and Texas as costs in Silicon Valley, located in California, continue to rise.

The CEO’s comments come as U.S. President Donald Trump pushes for a return of manufacturing production to the U.S. Super Micro Computer already has a manufacturing facility near its headquarters in San Jose, California. But more production could be moved to the U.S. in coming years, said Liang.

Expensive Move

In February of this year, Super Micro Computer said it planned to build a third campus in the San Francisco Bay Area, expanding its footprint in that region. In terms of manufacturing in the U.S., Liang said it is expensive and that America currently has outdated infrastructure and a service-based workforce.

Despite the challenges, Super Micro Computer is looking at the feasibility of onshoring more of its manufacturing to the U.S., said the CEO. The company makes servers that run artificial intelligence (AI) microchips and processors in data centers. Despite being in a hot sector, SMCI has struggled with accounting and internal control problems.

As such, SMCI stock has declined 51% over the last 12 months. In April of this year, Super Micro Computer was the most-shorted stock in the S&P 500 index, according to Dow Jones Market Data.

Is SMCI Stock a Buy?

The stock of Super Micro Computer has a consensus Moderate Buy rating among 12 Wall Street analysts. That rating is based on six Buy, five Hold, and one Sell recommendations issued in the last 12 weeks. The average SMCI price target of $40.83 implies 7.12% downside from current levels.

Read more analyst ratings on SMCI stock