Last month, Pamela Griffin and two other residents of Taylor, Texas, took to the lectern at a city council meeting to object to a data center project. But later, they sat back as council members discussed a proposed tech factory. Griffin didn’t speak up against that development. No one did.
A similar contrast is repeating in communities across the US. Data centers are meeting unprecedented public resistance, with environmental costs a leading concern. More of them have been needed to power a growing appetite for AI, and they’ve become obvious flash points for communities worried about what automation could mean for them. However, many of the factories getting built to supply servers, electrical gear, and other parts to data centers are facing virtually no opposition.
Factories tend to create more jobs and drain fewer natural resources than data centers do, so with the exception of a few controversial chipmaking fabs in several states, they have been sailing through local hearings to get permits and tax breaks. But experts who follow supply chains say the minimal scrutiny on manufacturing projects highlights a potential new strategy for activists fighting data centers and a source of risk for communities who may be investing in a short-lived boom.
“At some point, people are going to figure out what the critical factory is that can bring all the data centers to their knees, and they will go after that,” says Andy Tsay, a Santa Clara University professor who studies global trade and reshoring.
Though targeting the supply chain could be a new way to slow data center construction, Griffin says organizers are spread too thin to take on more. So for now, the door is wide open to manufacturers to grow their US presence and feed the data center market without overwhelming resistance.
“We need to start at the bottom and get those guys that make those servers, but we first got to get people to understand what these data centers are,” Griffin says. “We need to pick our battles.”
Her focus at last month’s council meeting was on opposing a proposal for a second data center in Taylor, following one being built near her home that she’s suing to stop. That evening, Griffin and her fellow activists knew the council also would be considering a proposed factory for Taiwanese manufacturer Compal. But the site’s potential role in supporting the data center industry wasn’t obvious to them.
Griffin’s case shows what communities protesting data centers are up against if they consider also challenging manufacturing projects: opacity, public perception, and the prospect of additional legal battles.
Server Farms
City records describe Compal’s intentions as making “servers,” in addition to everything from smart home devices to automotive electronics.
It’s a broad list, but Compal spokesperson Tina Chang tells WIRED the Taylor factory will be for the company’s server business. The building is being leased by Compal USA Technology, a subsidiary that was established last year for the purpose of expanding Compal’s server product operations in the US. Another site in nearby Georgetown, Texas, announced at the same time as the Taylor facility, will “establish a server service center supporting enterprise and cloud infrastructure needs,” according to the company.
Taylor, which is near Austin, spent over a year courting Compal, which considered alternatives globally before choosing the city. A prebuilt 366,000-square-foot facility won over the company, which said it is signing a nearly $66 million lease with plans to invest $200 million overall. “They fell in love with the openness,” Ben White, president of the Taylor Economic Development Corporation, told the city council at the December meeting. “It gave them the flexibility to do what needed to be done.”
White added that the 900 jobs Compal expects to create would make it the second to only Samsung as the largest employer in the city. Council members asked a couple of basic questions about the jobs and competing cities before unanimously approving nearly $4.4 million in tax breaks for the project. “Another home run,” mayor Dwayne Ariola said of the project.
Griffin, a retired teacher and learning center director who grew up in Taylor, says she and fellow residents deserved more transparency at the meeting about Compal’s work with data centers. Even so, mounting a campaign to stop a factory would have been difficult because it could have painted her and fellow critics as anti-development.
“I don’t want to be seen as trying to stop everything from coming into Taylor,” Griffin says. “I’m just trying to stop data centers from coming into city limits. If we stop the ones trying to get the jobs in, then people will turn against us and say we’re trying to stop jobs.”
Masheika Allgood, founder of AllAI Consulting, which has been advising community groups that are against data centers, notes that another challenge is that the data center industry is well funded to lobby politicians and run public relations campaigns to combat opponents. Factory developers are likely in a similar position, and critics don’t have the resources to fight on multiple fronts. “These are difficult, exhausting fights,” Allgood says. “So, while it would be ideal to fight on all fronts, that’s too much to ask of folks.”
New or expanded factories have been pitched as necessary to keep up with growing demand and alleviate the impacts of tariffs on imports to the US. It’s sensible that servers factories would want to set up near their customers, and, in the US, Texas is second only to Virginia in terms of data centers.
Cities find having both data centers and factories valuable because they balance each other out in some ways. Data centers don’t create many jobs, but they generate ample property tax revenue. Factories increase employment but also the demand on public services such as roads, schools, and benefit programs, adding more costs. “Both types of projects can be very beneficial to our community as we seek to attract more good-paying jobs close to home for our residents and … reduce our reliance on residential property taxes,” says Jerrod Kingery, a spokesperson for Taylor.
Other cities are making similar determinations. Last month, Georgetown’s city council unanimously approved about $1.8 million each in public support for Compal and another Taiwanese manufacturer, Pegatron, to move into town. Compal plans to service servers at a nearly 213,000 square foot space. Pegatron expects to create about 100 jobs at a 169,000 square foot factory, its first in the US.
Similar to the Compal factory in Taylor, there’s little public-facing information about what, specifically, Pegatron will produce. Industry insiders speculated to Taiwan’s United Daily News that the factory will mainly produce servers. In an unsigned email, Pegatron declined to comment on specific plans but said its project has “proceeded as planned.”
No members of the public spoke up about either project in Georgetown during last month’s council meeting . Earlier, when the city posted on Facebook to celebrate Pegatron’s plans, a few commenters raised questions about how local water, electricity, and traffic could be affected, with some conflating the factory with a data center. But after the city posted a clarification saying that “facilities like these use minimal water” and “pay for their own electricity,” only a few more comments trickled in.
Cameron Goodman, director of economic development for Georgetown, says the city has been deliberate about locating factories “in locations with appropriate roadways, water, wastewater, and electrical infrastructure” and recruiting companies that “are well suited” for those spaces.
Fabs where computer chips are produced do use large amounts of water, and activists have protested plans for new fabs in Arizona, Indiana, and New York. But concerted opposition to other links in the data center supply chain, such as factories in Texas, California, and Colorado that make electrical equipment, has been limited.
Cities welcoming those suppliers could face economic challenges if the massive buildup in AI data centers is symptomatic of a bubble that will soon pop, as some skeptics believe, and demand for servers and other parts slows. Or if data center opponents such as Griffin start to have widespread success, that could also undermine the need for more production.
But the immediate prospect of more jobs and economic growth has put longer-term concerns far in the distance, and manufacturing for data centers continues to accelerate. Compal’s head of US human resources, Rick Ortiz, told the Taylor city council that the company hopes to be “part of the community for many years to come.”
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