London Economics International research shows headline growth in U.S. data center electricity demand “cannot be supported by a realistic expansion of global semiconductor chip capacity,” the consulting firm said on July 7.
“Even under optimistic scenarios for global chip manufacturing growth, LEI finds that projected data center demand from just 77% of the US power market would require 90% of global chip supply through 2030.”
In a recent report, LEI tallied projections of U.S. data center electric load growth from independent system operators, regional transmission organizations, and balancing areas covering about 77% of U.S. electric load.
The report was prepared for the Southern Environmental Law Center, which has voiced concerns about the environmental impact of data centers.
LEI performed an independent outlook for global expansion of semiconductor chip supply incorporating rapid but realistic growth in chip capacity, as well as increases in chip energy efficiency and computing capacity.
LEI found that, if the ISO/RTO/BA demand outlooks are taken at face value, the U.S. would need 90% of incremental global supplies from 2025-2030.
“This is simply unlikely to occur. The United States currently buys less than 50% of global semiconductor chips annually, and other countries are also seeing strong growth in data center development,” LEI said.
“This result indicates that growth in data center electric load in the United States will fall short of the ISO/RTO/BA tally, because there would not be enough AI chip capacity in the world to meet this demand. It supports the anecdotal evidence that data center developers are duplicating requests for electric interconnection.”
Utilities, “like any other business sector, must make investment decisions under uncertainties about the future,” LEI said.
Data centers “present a particular challenge because they are large consumers—and whether an individual large load customer materializes could impact the success or failure of utility investment plans.”