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Why Did SK tes, a Global E-Waste Company, Establish Operations in Virginia Known as the Global Capital for Data Centers?

“SK tes (previously known as TES)”, a subsidiary of SK ecoplant specializing in e-waste recycling, has embarked on a new chapter under its new name. The company is advancing to the next level by establishing a large-scale facility in Virginia, U.S., specifically designed for processing assets of hyperscale data centers. Let's explore the background of this facility and what lies ahead for SK tes.

On March 13, SK tes’s “IT Asset Disposition (ITAD) facility, tailored for *hyperscale data centers”, was inaugurated in Fredericksburg, Virginia. IT Asset Disposition involves the secure and thorough destruction of data stored in IT assets such as servers, technically including their recycling and reuse post-data destruction. SK tes’s newly completed facility is explicitly geared towards managing servers and their accessories (racks) in hyperscale data centers and is designed to be hyperscale, spanning an impressive 12,000 ㎡. This facility dwarfs SK tes’s existing ITAD sites across the U.S. (located in Seattle, Atlanta, Fredericksburg, and Las Vegas), boasting three to four times their size. This facility is capable of processing up to 600,000 servers annually, equivalent to around five hyperscale data centers.

*Hyperscale Data Center (HDC): A very large data center. Typically, data centers covering over 10,000 ㎡ of floor area and housing more than 100,000 servers are classified as hyperscale data centers.


As briefly touched upon, ITAD involves the procedures of “data erasure” and “resource recycling” for IT assets. Delving deeper into SK tes’s ITAD process, we find that after data wiping through software or physical means such as shredding, assets in good condition undergo refurbishment while others are monetized by extracting valuable components through part harvesting or selling shredded metal scraps.

The global interest and expectations surrounding the ITAD market are considerable. Forecasts suggest the global ITAD market will reach $14.5 billion by 2022, expanding at an annual rate of 8% with projections soaring to $31.4 billion by 2032 (Global Market Insights). Driving this growth is the “data center”, standing at the forefront. The rapid growth of cloud-based artificial intelligence (AI) technologies and services, coupled with the widespread adoption of digital transformation (DT) across various industries, has sparked a surge in data center demand, similar to an “explosion”. Currently, approximately 10,000 data centers operate worldwide with an estimated addition of 100 new facilities annually over the next six years (Synergy Research Group). Notably, the number of hyperscale data centers is growing rapidly, fueled by the need for more efficient, high-performance, and large-scale servers necessitating shorter replacement cycles, now averaging less than four years. Hence, SK tes’s establishment of a specialized ITAD facility tailored to manage servers from large-scale data centers aligns with this trajectory.

Currently, hyperscale data centers contribute 37% of global data center capacity, and this figure is projected to surpass 50% of the total capacity within the next five years (Source: Synergy Research Group)


SK tes’s decision to establish its ITAD facility dedicated to hyperscale data centers in “Virginia” holds significant implications. The U.S. accounts for 53% of the global data center capacity as of 2022 (Synergy Research Group), with Virginia claiming one-third of this capacity, positioning it as the “data center capital of the world.” In North Virginia, the concentration of data centers of global tech companies in “Data Center Alley” is so profound that a staggering 70% of the world’s internet traffic flows through the region daily.

North Virginia boasts over three times the quantity of data centers compared to the next largest market, Singapore (Source: JLL Research, 2023 Global Data Center Outlook)
The map depicting data center locations in Virginia (Source: Virginia Economic Development Partnership)

Although Virginia has gained recognition for its proliferation of data centers, its original moniker was the “birthplace of the Internet.” It was in the state that the ARPAnet network, an early form of the Internet, first took shape. Virginia’s robust backing of the IT industry beginning with the birth of the ARPAnet network, coupled with tax incentives, a large skilled labor pool, and extensive networks, has seamlessly transitioned into support for the data center sector. Furthermore, the state’s abundant renewable energy resources have bolstered its appeal to companies seeking to establish data centers, particularly in the cloud, IoT, financial, telecommunications, and government sectors. The state’s popularity is evidenced by the presence of over 150 hyperscale data centers in the state, constituting 35% of the world’s hyperscale data centers (Virginia Economic Development Partnership): Hyperscale data centers are renowned for their challenges spanning site selection including considerations such as land availability, power reliability, accessibility, and local regulations as well as their operational management complexities. SK tes’s ITAD facility in the heart of the global data center capital is poised to offer seamless asset acquisition and logistical efficiencies. That’s why this move is expected to further solidify SK tes’s distinctive position in the market.


SK tes (formerly known as TES), which became a subsidiary of SK ecoplant in 2022, has been a frontrunner in the global e-waste recycling industry since 2005. Its earnest expansion into the ITAD sector began in 2016 with the acquisition of Datasserv, a European ITAD specialist. Since then, SK tes has established itself as a distinguished player, boasting world-class technology and holding multiple licenses tailored to comply with diverse e-waste and information security regulations across different countries. This strategic approach has elevated SK tes to the status of the “world’s largest networked company,” serving businesses in over 100 countries through its network of 46 facilities worldwide.

View of SK tes’s ITAD facility located within its hyperscale data center in Virginia
View of SK tes’s ITAD facility located within its hyperscale data center in Virginia

The ITAD facility in Virginia is poised to serve as a strategic cornerstone in fortifying SK tes’s competitive edge. Initially, leveraging its distinctive facility size, SK tes will concentrate on establishing an optimal operating system, securing volumes from big tech firms in Virginia requiring frequent server replacements, and financial sector entities needing flawless data processing. However, SK tes plans to leverage the Virginia facility as a base to preempt the North American market, seamlessly integrating it with its existing four ITAD facilities across the U.S. Moreover, the company has plans to expand its ITAD footprint in the Western U.S., Europe, and key Asian markets, thus maximizing global synergies. It will be intriguing to see the extent of SK tes’s influence in the global market with the establishment of its Virginia-based ITAD facility.

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