If the question is “what are data centers hungry for,” the answer is a simple “yes.” We hadn’t talked about the RAM memory crisis not because would have finishedbut because it was nonsense keep repeating it. The summary is that things are still as bad as they were a few weeks ago and, although the machines are at full capacity to create more, everything is going to the same place: the AI platforms of the data centers.
But it is no longer that they have broken the market for RAM, SSD, hard drives and everything that has to do with chips: it is that they are now going after batteries.
The Panasonic case. The Japanese giant advertisement a few hours ago its plan to triple its lithium-ion cell production capacity. They are going to expand their facilities dedicated to this, but they will also adapt some of their manufacturing plants for elements for the automotive industry to manufacture more batteries. All the extra batteries they can make will be few, to the point that they not only propose the change for Japanese plants: also for foreign ones like the one in Kansas.
Because? The short answer is because of AI. The long answer is that AI can’t stop working for even a second, and that’s why computers need backup power sources. That energy comes from batteries that are installed between the racks and which, in the event of any outage or specific peak, they ‘pull’ in order to continue operating. And since the equipment requires an insane amount of energy to operate, many, many backup batteries must be made.
They are still modules with hundreds of “stacks” that are embedded in the racks
All sold. The forecast is such that the Japanese company estimates that, for the next fiscal year, it can sell batteries worth 800,000 million yen, about 5,000 million dollars. It would quadruple its current sales and that implies something else: everything is sold. Its customers have already bought 80% of Panasonic’s output, leaving non-customers to fight for just a fifth of the volume.
That will increase prices, generate shortages and cause the same thing that is happening with RAM and other components: there are no units, prices skyrocket, companies see that there is demand and allocate their production to creating that product and the consumer market suffers the consequences. It’s exactly the same thing we’ve seen with HDDs, with Seagate and Western Digital pointing out that what they were going to produce during the next few months was already sold.
And it has also happened with RAM. The situation with them became so desperate that the main manufacturers have begun to ask for payments three years in advance. Because as the boss of SMIC – one of the largest foundries in China – pointed out a few days ago, everyone wants to have the infrastructure of the next decade by… yesterday.
Supercapacitors. Aside from the “bad” news, Panasonic is also working on something new. Compared to traditional capacitors, the Japanese company is developing supercapacitors for data centers. These are capacitors that can store more energy, but also deliver it more slowly.
They are denser than batteries and are expected to be high-fidelity elements to support data center equipment during outages or peak loads. They wait have them ready by 2027.
The renewables. In the end, these Panasonic batteries (and other manufacturers) are simple safety elements to ensure that uninterrupted flow of power in the hyperscalers’ racks. How does it affect us? Well, because the capacitors and equipment manufactured by Panasonic are also found in consumer hardware and if they now focus on data centers, the same thing will happen as with NAND chips and everything that uses a memory chip. And, in the background, there are also the most conventional batteries to store a large amount of energy from renewables.
Because we have already mentioned that data centers consume a lot, so much so that even has turned to coal, gas is a common resource and there are companies that are opening its nuclear power plants. But if you opt for renewables, it will be necessary to equip data centers with tens of hundreds of batteries capable of absorbing the energy blow. In fact, there are already car battery manufacturers that they are converting.
In short: everything bad… except for companies that manufacture those components.
Images | panasonic
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