Not quite a "single point of failure" but still the kind of concentration that keeps the supply-chain wizards up at night.
From Observer, August 23:
A.I. data centers are hungry for a special type of hardware for which Mitsubishi Electric makes half the world's supply.
As Big Tech companies race to dominate the A.I. arms race, a surge in demand for hardware powering A.I. has resulted in massive paydays for companies that make it. Mitsubishi Electric, a Tokyo-based company that manufactures electronics and electrical equipment, has recently seen a surge in sales for its optic transceivers, which are key to enabling high-speed transmission in data centers. (Mitsubishi Electric and Mitsubishi Motors are both connected to Mitsubishi Heavy Industries.)
Demand for the devices is so high that Mitsubishi Electric is planning on increasing its production capacity by 50 percent next month, said Masayoshi Takemi, executive officer and group president of the company’s semiconductor and devices business, in an interview with Bloomberg. “But that won’t be enough to meet the strong level of inquiries we’re getting,” he said. “We may need to double what we’ll have in September.”
A desire for bolstered data center capacity is largely driven by the mass energy use required for A.I. A ChatGPT query, for example, takes up nearly ten times as much electricity as a Google search, according to a recent Goldman Sachs report. The report estimated data center energy demands will grow by 130 percent by the end of the decade. Data centers operated by hyperscalers—cloud service providers offering mass amounts of computing and storage—have proliferated in recent years, with 1,000 established globally as of early 2024, according to data from the Synergy Research Group. In the coming years, 120 to 130 data centers are expected to come online, said the research firm.
What are optical transceivers?....
....MUCH MORE
This, on the other hand: "The global semiconductor industry relies on a single NC mountain town".
