Analysis of artificial intelligence’s place in the world is as ubiquitous (and occasionally, insufferable) as those chatbots cluttering up many businesses’ websites. Not unironically, then, am I adding to the din.
More than 5,400 data centers operate in the US alone today, including more than 50% of the world’s hyperscale AI facilities. Last year alone, global spending on data centers reached an estimated $580 billion and is expected to continue to grow at a 28% clip per year through 2030, with AI investments alone reaching $200 billion by 2030. Assuming much of that investment is financed, interest charges from that capex could exceed $1.5 trillion.
Much of the impact – realized or projected – has focused on energy consumption and location, and for good reason. While local folks might want access to AI so they can make quick work of otherwise time-intensive projects, they tend not to want to see their energy bills spike to underwrite the data center across town.
The average data center holds 2,000 to 5,000 servers, with smaller ones ranging from 500 to 2,000. According to the International Energy Agency, worldwide electricity consumption for data centers is projected to double by 2030 to around 945TWh, which translates to about 3% of total global electricity consumption. Given how much developed economies rely on computing power, that doesn’t seem too bad.
However … during that span, data center electricity consumption is expected to grow around 15% per year, which is more than four times faster than the growth of total electricity consumption from all other sectors. And in areas with high numbers of these server farms, consumer pushback is already being felt.
Then there’s the comparisons to the dot-com bubble, when high demand for the nascent Internet industry spurred mass overbuying of – that’s right – servers, culminating in Cisco, then (and now) the largest network infrastructure OEM, taking a $2.25 billion inventory write-down in a single quarter. (In layman’s terms, that meant Cisco determined the market value of the finished goods it had on hand was over $2 billion less than what they originally paid. Ouch.)
Amid the hue and cry, less recognized are the downstream material shortages threatening to jack up prices on all kinds of products. And for those of us who recall the material shortages of the 1990s, forgive us if we think the potential financial reckoning might already be at hand.
AI datacenters will use some 70% of all high-end DRAM production in 2026. Component suppliers are changing up their processes, cutting lower-margin product to free capacity to feed AI demand. DDR4 memory is falling victim, as major component makers sunset those parts. Memory prices shot up about 50% in the fourth quarter, and TrendForce sees prices rising by another 70% in 2026 due to persisting shortages.
Hope you bought that new computer ahead of the Windows 11 switch, because it is probably about to become a whole lot more expensive. “Memory shortages are affecting the entire industry, and the impact will likely reshape market dynamics over the next two years,” said Jitesh Ubrani, research manager, IDC, in the research firm’s quarterly PC industry forecast.
The surge has laminate vendors and their suppliers on edge, too. Supplies of BT resin and T-glass, used in materials for much of the AI chip substrates and boards, are already strained. Nittobo, the Japanese company that holds most of the patents and manufacturing expertise for T-glass, and Mitsubishi Gas Chemical, the largest supplier of BT substrate raw materials, are both warning of sold-out conditions into the second half of 2027.
The knock-on effect is not just that PCB designers must adjust their component BoMs, but fabricators need to consider different glass fabric styles. A lot of conversations need to take place, in short order.
As AI effects are throughout the supply chain, whether humanity is unlocking the doors to its own replacement might be the least of our concerns.
P.S. A warm welcome back to Andy Shaughnessy, our former editor who is returning to become our first content architect! Be sure to say hi to him at PCB East this year. The annual conference (registration is open) and exhibition takes place April 28-May 1, at the DCU Center in Worcester, MA. Sign up now!
Mike Buetow is president of PCEA (pcea.net); This email address is being protected from spambots. You need JavaScript enabled to view it..
