A new report published by Wood Mackenzie, a global research company, reveals that producers of metals like aluminum and copper are seeing a huge uptick in the demand of these metals beyond what current estimates suggest.
Their research shows that the demand for metals in the data center industry extends beyond the volume needed to make data center cooling systems, server racks, and other components within the data centers themselves.
The study points out that large amounts of metals are needed to establish the requisite infrastructure needed to support the operations of the data centers. They cite examples like the aluminum and copper used to reinforce the grid in locations where data centers are being built, establishment of transmission networks to provide power and connectivity to data centers, as well as onsite power generation and storage systems.
In their estimation, the volume of metals needed outside the data centers themselves is nearly four-fold what is used inside, and existing projections miss this important reality.
Shashank Sriram, a senior analyst focusing on aluminum at Wood Mackenzie, emphasizes that most people who analyze metal consumption by data centers only stop at the door of the data center. He adds that the full picture can only be obtained after taking in the totality of the metals used inside and outside the data center.
The study reveals that 25% of enclosures and racking in data centers is made from aluminum while 55% of cooling systems are also made using aluminum. As more hyperscale data centers are planned and constructed, one can begin to imagine the total amount of aluminum that will be required to make these systems inside data centers.
As for copper, Wood Mackenzie data shows high-density nodes in data centers are the largest consumers of copper in these facilities. The key driver determining how much of this metal is used is the complexity of the nodes rather than their structure.
The analysis estimates that copper and aluminum could see a 10% increase in demand by 2030 due to the escalating buildout of data centers around the world.
A growing trend pointed out in the study is the inclusion of onsite power generation at data center locations. This takes the form of solar or wind energy, gas electricity generation systems, solid fuel cells, and in some cases, modular nuclear energy reactors. Wood Mackenzie projects that onsite power generation is likely to double the volume of metals needed by data centers.
For firms like Micron Technology Inc. (NASDAQ: MU) that manufacture HBM, NAND, DRAM and other memory products used in data centers, the current boom opens the door to windfall revenues as AI firms race to grow their data center footprint.
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