Although data centers have little impact on copper demand, the annual increase in supply is already comparable to the gap between supply and demand, and may exacerbate copper shortages, and it is optimistic that copper prices will continue to rise.
The Zhitong Finance App learned that Everbright Securities released a research report saying that according to Cushman & Wakefield, the new installed capacity of global data centers in 2023 was 7.1 GW, while the copper consumption of 1MW data centers was 65.8 tons (Schneider Electric estimates), then the amount of copper used in global data centers in 2023 was 467,000 tons, accounting for 1.7% of global copper consumption in 2023. The bank previously predicted that the global refined copper supply and demand gap (supply-demand) in 2024/2025 will be 2/140,000 tons. The bank believes that although data centers are less driving copper demand, the annual increase provided is comparable to the supply and demand gap, and may exacerbate the copper shortage, and is optimistic that copper prices will continue to rise.
Incident: Recently, Nvidia released the GB200 superchip, and the market's attention to copper connections has increased dramatically. At the same time, the recent rapid development of the AI industry will also drive the demand for AI data center construction. The bank measured the demand for copper driven by emerging fields of electronic communications such as data centers and GB200.
The views of Everbright Securities are as follows:
In 2026, electricity consumption in data centers (including AI data centers), cryptocurrencies, and AI will increase by 74% compared to 2022 (neutral assumption).
According to the IEA, the total electricity consumption of data centers, cryptocurrencies, and AI in 2022 is about 460 TWh, accounting for nearly 2% of global electricity consumption. The IEA predicts that by 2026, the electricity consumption of data centers (including AI data centers), cryptocurrencies, and AI will rise to 620 TWh, 800 TWh, and 1,050 TWh, respectively, under conservative, neutral, and optimistic assumptions, with compound growth rates of 8%, 15%, and 23%, respectively.
In 2026, the copper consumption of data centers (including AI data centers) was about 710,000 tons, an increase of 51% over 2023 (neutral assumption).
According to Cushman & Wakefield, the new installed capacity of global data centers in 2023 was 7.1 GW, while the copper consumption of 1MW data centers was 65.8 tons (Schneider Electric estimates), then the amount of copper used by global data centers in 2023 was 467,000 tons, accounting for 1.7% of global copper consumption in 2023. The bank assumes that the future growth rate of the installed capacity of data centers will be consistent with the compound growth rate of electricity consumption described above. Under a neutral assumption, the copper consumption of data centers in 2024-2026 will be 53.6/61.6/707,000 tons, respectively, with annual increases of 6.9/8.0/910,000 tons respectively (considering only copper used in equipment, not considering the demand for supporting power grids that increase in power generation).
The GB200 copper cable is close to 3218.7 meters.
The GB200 superchip recently released by Nvidia in GTC 2024 uses a copper connection scheme, mainly due to the low cost and low energy consumption advantages of copper connections. According to Nvidia data, the cabinet uses a total of about 5,000 independent copper cables (each copper cable contains 8 sets of high-speed copper wires, 1 group includes 2 round-trip wires and 1 ground wire, about 24 copper wires), and the total length of the cables used is close to 2 miles (about 3218.7 meters).
GB200's demand for copper is driving about 40,000 tons (assuming an annual demand of 50,000 units).
GB200 uses an American standard AWG26/30 wire diameter, with a diameter of 0.405/0.255 mm; if calculated according to AWG26, the thickness of the silver coating layer is 3 μm (the thickness of the silver coating layer for domestic copper cables is generally 1-3 μm). Based on the copper density of 8.96 g/cm3 and the cable length of 3218.7 meters, the demand for copper metal in a single cabinet is about 86.5 kg. If the global annual demand for GB200 is 50,000 units, the corresponding annual copper demand will be 4,325 tons, which will have less impact on copper demand.
Risk warning: Data center construction progress falls short of expected risk; calculation assumptions fall short of expected risk.