THE BOTTOM LINE UP FRONT
The semiconductor and AI sectors are expanding rapidly, with capital expenditure forecasted to quadruple from $100 billion to $400 billion over the next few years, driven by AI proliferation and digital transformation. This growth demands large-scale infrastructure investments in data centers and semiconductor fabs, which are as complex as LNG facilities.
These facilities are capital-intensive and comparable to traditional energy megaprojects in scale, requiring millions of cubic yards of concrete and miles of pipe. Data centers are also transforming into ecosystems with interdependent energy, water, and connectivity projects.
However, power availability, logistics bottlenecks, and regulatory hurdles pose significant risks to execution. Small modular reactors (SMRs) and vertically integrated supply chains are emerging as potential solutions to meet the challenges of speed, scale, and sustainability in this evolving ecosystem.
FAST FACTS
Scale of Semiconductor Fab + AI Data Center 'Megaprojects'
- Power Density for AI Data Centers: A typical ChatGPT query consumes 3 to 35 times more power than a Google search query. AI data centers typically use at least 3% more power than traditional cloud data centers and need 10-15% more wiring and cabling.
- Concrete Usage: Greenfield semiconductor fabs require the same or more concrete than a nuclear power plant, involving hundreds of thousands of cubic yards.
- Pipe Installation: Semiconductor fabs demand over 1 million feet of pipe, equivalent to an LNG facility.
- Laydown Area for Semiconductor Fabs: Fabs require 300,000 to 500,000 square feet of laydown warehousing space.
Suffice to say, there a myriad of second of direct, second and third order opportunities and threats for numerous sectors and communities as these projects vie for electricity, water, real estate and global shipping capacity.
"Semiconductors have always had the same or very similar cyclical nature that the LNG and oil and gas industries have had. More recently, one of the things we’re seeing is that cyclical nature is starting to drop off. The exponential demand for chips isn’t going away...Everything is connected. Data centers need chips, chips need fabs, and fabs require a robust supply chain. The entire ecosystem has to grow together." "
– K, Major US-based EPC Executive
