Data center spending to reach US$31.6tn by 2050

Global data center spending is set to reach US$31.6 trillion through 2050 to meet the world’s growing appetite for artificial intelligence (AI), an investment boom with no precedent in history, PricewaterhouseCoopers LLP (PwC) said in a report released on Wednesday.

Dwarfing projects such as the railways, Internet and electrification, spending on data centers could even hit US$50 trillion over the next two-and-a-half decades if AI adoption accelerates beyond PwC’s “central scenario” forecast, the firm said.

For comparison, US GDP is about US$30 trillion.

With consumers, companies and governments increasingly using AI, tech giants such as Microsoft Corp and Amazon.com Inc and smaller data center providers are setting up new computing facilities across the planet at a rapid clip. The bulk of the spending would go into what fills the data centers — hardware from companies such as global AI chip leader Nvidia Corp.

At the same time, the tech industry is trying to blunt a backlash against data centers that threatens to slow down the buildout.

At least 75 projects, worth about US$130 billion combined, were blocked or delayed by local opposition during the first three months of this year, according to research group Data Center Watch.

Protesters cite concerns about environmental impacts, resource consumption and more broadly how AI could upend employment and society.

The US would capture nearly half the projected data center spending, at US$15.1 trillion, PwC said.

The Asia-Pacific region would follow at US$8.2 trillion, Europe at US$5.6 trillion, the Middle East at US$1.1 trillion and Africa at US$255 billion of the cumulative capital expenditure, PwC’s inaugural Global Data Center Outlook showed.

“Railways. Electrification. The Internet. Each required enormous amounts of capital and defined an era,” the researchers said in the report. “The AI infrastructure cycle under way dwarfs all three. This one resets every four to six years — and shows no signs of ending.”

On an annual basis, global data center spending would increase from about US$800 billion this year to US$1.1 trillion in 2030 and US$1.8 trillion in 2050, PwC predicted.

China and India would drive the largest share of incremental demand, supported by large populations, rapidly expanding digital economies, and substantial headroom for AI to embed in business and consumer activity.

While global demand is strong, factors such as power availability, data sovereignty requirements and the flow of semiconductors would determine which regions capture the investments, PwC said.

Power would be the foremost factor that shapes where AI infrastructure investment occurs, it said.

Indeed, much of the forecast hinges on how fast reliable electricity supply for data centers can be established, the report said.

Affordable, reliable, and increasingly low-carbon electricity at scale is the hardest requirement for many markets to meet.

While the researchers’ projection assumes a fairly open trading system where chips move freely across borders, disruptions in semiconductor supply chains could cut global investment by nearly 20 percent, they said.

Meanwhile, a growing sovereignty push could redistribute, but not reduce, global investment.

“The US$31.6 trillion question isn’t whether the capital exists. It does,” the researchers said. “Nor is the question whether the demand is real. It is. The question is which regions, operators and institutions are positioned to capture it and which aren’t.”

EXPANSION: The 3-hectare site would include small clean rooms and laboratories as well as a world-class training base for advanced packaging talent, the company said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is to establish a presence in the Baipu Industrial Park (白埔產業園區) in Kaohsiung to accelerate the testing and validation of semiconductor materials and equipment, a company executive said on Tuesday. The company is working with the Ministry of Economic Affairs and the Kaohsiung City Government on the plan, which is expected to improve validation efficiency by 25 to 50 percent, TSMC vice president of advanced packaging technology and service Jun He (何軍) said at a 3D IC global summit held ahead of the Semicon Taiwan trade show, which opened in Taipei yesterday.

TSMC would also conduct

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is accelerating capacity expansion fivefold this year, but it is still unable to keep up with the booming demand for artificial intelligence (AI), TSMC deputy cochief operating officer Cliff Hou (侯永清) said yesterday. This year alone, the company is building 25 chip manufacturing fabs and advanced packaging facilities worldwide, including 13 plants in Taiwan, which is unprecedented, Hou said at a CEO Summit fireside chat at Semicon Taiwan in Taipei.

In the past, the company was able to build five or six factories a year, said Hou, who is also chairman of the Taiwan Semiconductor Industry

Visitors look at a 64-qubit superconducting quantum computer on display at the Fujitsu booth at the Semicon Taiwan trade show in Taipei yesterday.

Silicon photonics would play a dominant role next year and make chip-level co-packaged optics (CPO) packaging possible, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday. “For years, critics questioned the reliability of CPO. The doubts are being thoroughly dismantled by real-world data and market validation,” TSMC vice president of advanced packaging technology development K.C. Hsu (徐國晉) said at a SEMI forum in Taipei.

The company is on track to enter production of CPO later this year, Hsu said in another forum arranged by Imec in Taipei yesterday, about four months after TSMC announced its progress in CPO development in May.