TES is opening a facility in Virginia to decommission hyperscale data centers, part of the ITAD company’s strategy to benefit from the continuing transition of computing power from individual devices to the cloud.
“There’s just a general shift in technology, and this is really positioning us to be ready for that shift and take advantage of it,” Bill Vasquez, TES Americas general manager, told E-Scrap News.
“We feel we’re well positioned as the global leader for ITAD in general, so it’s a natural extension to bring these additional services to our clients and service them well,” he later added.
Global ITAD services provider TES announced on July 31 it will open a 128,000-square-foot facility in Fredericksburg, Va. to process electronics from hyperscale data centers. The operation, which will be constructed in a pre-existing building, is about four miles from TES’ existing ITAD facility, which will likely be shut down after the new plant opens, Vasquez said.
The plant will focus on parts harvesting and reuse of equipment from hyperscale data centers but will also include corporate ITAD services, as well. With ample dock doors, an open design and floors that can handle a lot of weight, the plant will have the ability to efficiently bring in hundreds of racks of computer equipment at a time, he said.
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Because the facility is located in an area with a number of existing and upcoming data centers, the building already has the electrical service needed to wipe large batches of drives at one time, he said. “That kind of worked in our favor,” he said.
The plant, which is expected to be up and running in January 2024, will focus on reuse, relying on downstream partners for recycling of large volumes of end-of-life electronics, he said.
TES will likely hire 50 or so employees for the Fredericksburg plant in coming months.
The TES press release described the upcoming facility as a “significant multimillion-dollar investment” and a “substantial financial commitment,” but it didn’t disclose a dollar amount. Vasquez said he couldn’t disclose the investment associated with the facility.
Before joining TES earlier this year, Vasquez worked for nearly three years at ITRenew, a data center decommissioning and ITAD services firm that sold to Iron Mountain in January 2022 for $718 million. Before that, Vasquez worked for Sims Recycling Solutions, which is now called Sims Lifecycle Services.
TES was itself acquired last year by South Korean conglomerate SK ecoplant in a $1 billion deal. TES has over 40 facilities around the world, with the latest U.S. location opening earlier this year in Las Vegas.
In the release, Eric Ingebretsen, TES’ chief commercial officer, noted that the goal of the purpose-built facility will be to process devices at the hyperscale level. “Processing 5,000 drives at a time is one thing; being able to process 100,000 drives at a time is something entirely different,” he said.
In the release, Keith Layton, TES’ vice president of hyperscale remarketing, noted the volatile markets for used electronics. That point has also been made in recent earnings releases from Iron Mountain, which has seen increasing throughputs but lower prices per unit sold.
“In my 27 years of secondary market IT resell, I have never experienced the volatility that we have today,” Layton stated. “With a true global presence, TES is uniquely positioned to weather the storm, grow throughout the U.S. hyperscale market, and provide world-class services to our global customers.”
Vasquez explained that TES’ footprint allows it to provide services for the same client in different regions. The company also has multiple channels around the world to sell used electronics into, allowing it to help sidestep market and trading challenges cropping up in any particular geographic area.