Deep inside the former Qimonda semiconductor plant in Henrico County is a room so vast and so ghostly white, visitors sometimes gasp when they step inside.
"This room is the room that tells the whole story," said David Robey, standing in the 100,000-square-foot expanse of open floor space, just one of many highly engineered rooms in the 1.3 million-square-foot plant that stands like a monument to the computer age.
The former fabrication room, almost disorienting in its hugeness, once held about 700 pieces of equipment involved in the micro-precise manufacturing of silicon-based semiconductors.
From 1998 to 2009, the plant on Technology Boulevard in eastern Henrico produced more than a billion memory chips, vital electronic components in the ever-growing global infrastructure of personal computers, computer servers and other devices that drive the digital economy.
In the two years since Qimonda filed for bankruptcy and closed the factory, the gigantic fabrication room — and much of the rest of the plant — has been stripped of its original semiconductor equipment and now stands empty.
Yet the plant's owner since early 2010, Kansas City-based Quality Technology Services, is bringing life back to the site.
The company is transforming the building and plans to once again fill its vast spaces, only with different technology that serves the other side of the digital economy.
"The interesting thing about this room is that a couple of years ago, it was one of the world's leading semiconductor automated facilities," said Robey, now vice president for facilities for QTS.
"Now, in just a short amount of time, it will be part of one of the world's largest data-center facilities."
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The plant is becoming a storehouse for the vast amounts of information streaming through cyberspace and onto computer screens. QTS customers will use space within the facility to house the servers and other equipment that supports their information-technology infrastructure.
The irony is not lost on Robey, a former operations manager at the Qimonda plant who has worked in manufacturing for most of his career.
While the plant once made the physical components of the computer age, "now, we are actually providing the space and services to support those very same components we made," Robey said.
"It's the transformation the United States is going through, from manufacturing to services," he said.
QTS acquired the 210-acre property for $12 million in a bankruptcy court auction in March 2010. The company says it plans to invest about $100 million in the plant, in a "multi-year" refurbishment that will transform the entire facility into data-center space.
It could take years to fill the space, but the market is growing fast.
Demand for data-center services has been growing, even during the recession, according to a report by Tier1 Research, a research firm focused on the information-technology industry. The global, multitenant data-center market has grown about 15 to 20 percent during the past five years, reaching about $13 billion in revenue in 2010.
The market is expected to reach $15.8 billion in revenue in 2011, $18.8 billion in 2012 and $22.4 billion in 2013.
"Definitely, QTS got a steal with that property, acquiring it in a bankruptcy court auction. It was a good deal for them," said Jeff Paschke, a senior analyst for Tier1 Research. The facility is likely to see new customer demand for years to come, he said.
"What is significant about the QTS property is the size of it and the amount of power that is available," he said.
Data centers require available building space, good access to high-speed Internet connectivity and abundant, affordable power. Stable and mild weather also helps because of the need for uninterrupted power and predictable climate conditions.
In November, QTS announced that it had signed its first user contract for the data center, a federal government-services agency that QTS wouldn't identify that started operations in one part of the plant late last year. The federal customer leased 6,000 square feet with a megawatt of power, with an option to double the size of its operation.
QTS, which has 12 locations in seven states, owns, operates and manages more than 3.1 million square feet of data-center space supporting more than 600 customers. The company says its 990,000-square-foot data center near Atlanta is the world's second-largest.
In an industry that is highly fragmented with more than 650 data-center providers, QTS ranks 22nd globally with about $112 million in revenue in 2010, according to a Tier1 report. The company's revenue is projected to reach about $131 million this year.
Even among the 25 largest players in the industry, most have a market share of less than 3 percent. The largest data-center provider, Equinix, had just more than $1 billion in revenue in 2010 and a market share of 8 percent, according to Tier1.
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Virginia is well-positioned to grab a significant share of the data-center market because of its proximity to Washington, where federal agencies and government contractors are among the top sources of demand for data-center services, Paschke said.
Jim Cheng, Virginia's secretary of commerce and trade, said data centers are a priority for the state agency in its business recruitment efforts.
"We have a lot of great sites for data centers," Cheng said. "We are so close to Washington, D.C., and the seat of government, which is going to be the source of a lot of data centers and data center-related activity."
The state is preparing for the increased activity by investing in broadband Internet access across Virginia, he said.
Other data-center providers in the Richmond area include Peak 10, a Charlotte, N.C.-based company that has 19 data centers in 10 U.S. markets.
The company recently completed an expansion of its data center on Park Central Drive near Parham Road in northern Henrico, nearly doubling the facility to 30,000 square feet. It serves primarily small to mid-size business customers.
Elsewhere in Virginia, Microsoft Inc. announced plans last year to invest $499 million to open a data center in Boydton in Mecklenburg County, creating 50 jobs. Microsoft has not announced a completion date, though work is ongoing on the facility.
Miami-based Terremark Corp. last year acquired 27 acres of land around its data center in Culpeper that will enable the company to add 200,000 square feet of data-center space and 100,000 square feet of office space, doubling the size of the facility.
And Harris Corp. announced plans last year to open a data center in Harrisonburg next month, adding 100 jobs.
Those announcements came after the Virginia General Assembly passed legislation proposed by Gov. Bob McDonnell in the 2010 session that expanded a sales and use tax exemption for data-center equipment. It applies to data-center investments of at least $150 million that create 50 new jobs, or 25 new jobs if the data center is in a locality with an unemployment rate of 150 percent or more of the average statewide jobless rate.
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While data centers can bring significant dollar investments and tax revenue, they typically do not require a large number of employees.
The QTS data center, for example, has about 50 employees and contractors now. While that number will grow as new customers lease space at the facility, employment will never approach the 2,500 employees who worked at the Qimonda plant during the peak of its production.
However, data-center jobs "are really high-level jobs," Cheng said.
"When you attract other data centers and develop a critical mass of people that support data centers and maintain them, it is a great thing for the state," he said.
A data center the size of the QTS facility could attract more jobs than typical centers because it also has 400,000 square feet of office space, so customers who are using the data center could place their own staff members there, Paschke said.
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The shutdown of the plant put thousands of people into the local job market at the worst point of the recession.
Some Qimonda employees even lobbied the General Assembly to offer incentives that would attract a "green technology" company, such as a solar-panel manufacturer, to the facility.
As it turned out, the plant was ideally suited for a data center.
"The good thing that I have found during this transition is that a large portion of the infrastructure and facilities for semiconductor (manufacturing) are applicable for data centers," said Robey, the QTS vice president.
For example, the plant was built with 245,000 square feet of raised floors designed to move air quickly through the facility. Along with the plant's 25,000 tons of chiller capacity, it allows for the type of climate control that a data center needs to keep vast amounts of electronic equipment from overheating.
"Utilizing all of those resources on-site is a large part of what we are doing," Robey said. "That is a very good reuse of this facility."
Thousands of employees once walked the Qimonda plant's "clean room" environment wearing head-to-toe body suits, to prevent even one loose hair from contaminating the sensitive processes and products.
Full-body suits are no longer necessary as employees renovate and refurbish the plant. Crews also work outside the plant along Technology Boulevard to install the additional fiber-optic lines that provide Internet access.
QTS employees at the data center include some former Qimonda employees such as Robey. Some, such as Mechanicsville resident Tim Price, worked for the semiconductor maker when the plant was being built in the late 1990s until it closed.
Price, who was among the last few employees left at the plant when it closed, said it was difficult watching so many colleagues and friends lose their jobs.
"Considering what we went through with the (economic) downturn and the bankruptcy, and seeing your friends getting laid off, I'm very excited about this opportunity," said Price, who was hired to work as a mechanical technician at the QTS data center.
"We built it (the semiconductor plant) up and saw it at its peak, and then we had to watch it come back down," he said. "Now, there is new life here, so we are all hopeful about that."
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