AI and Energy Infrastructure, Explained Plainly, The Physical Layer

The Physical Layer

AI and Energy Infrastructure, Explained Plainly

A journal on the physical constraints behind the AI buildout: power, grid connection, data centres, cooling and the supply chains that gate them. Written to be understood by anyone.

Equity Bottom-Up

Schneider Electric SE manufactures power distribution and automation systems. The Company produces circuit breakers, remote installation management equipment, panelboards, programmable logic controllers, industrial control products, detectors, human-machine interfaces, and process controls.  Schneider's products are sold various brands.

<ul><li>Schneider Electric makes the electrical and cooling equipment inside data centres.</li><li>More and more of what it sells them now arrives as whole units, assembled and tested in a factory, rather than as separate parts for workers to fit on site.</li><li>The reason is that skilled people on the building site, not just the equipment, now set how fast an AI data centre can switch on.</li></ul>

Schneider Electric makes the electrical and cooling equipment inside data centres.More and more of what it sells them now arrives as whole units, assembled and tested in a factory, rather than as separate parts for workers to fit on site.The reason is that skilled people on the building site, not just the equipment, now set how fast an AI data centre can switch on.

Schneider Electric sells AI data centres the finished system, not the parts

Ajinomoto Co., Inc. produces and sells a variety of food products, including seasonings, edible oils, processed foods, beverages, and dairy products.  The Company also develops and manufactures pharmaceuticals, amino acids, and specialty chemicals.

<ul><li>Ajinomoto, the Japanese company best known for seasoning, makes a thin film that sits between the layers of wiring under nearly all high-performance computer processors, by its own account.</li><li>AI chips sit on ever bigger and thicker bases, so by my reading each one needs more of that film than the chip before it.</li><li>Chipmakers rarely switch to a rival film, because testing a new one takes a long time, and that keeps the growth with Ajinomoto.</li></ul>

Ajinomoto, the Japanese company best known for seasoning, makes a thin film that sits between the layers of wiring under nearly all high-performance computer processors, by its own account.AI chips sit on ever bigger and thicker bases, so by my reading each one needs more of that film than the chip before it.Chipmakers rarely switch to a rival film, because testing a new one takes a long time, and that keeps the growth with Ajinomoto.

As AI chip packages grow, Ajinomoto's insulating film grows with them

ASML Holding N.V. develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips through lithography. The Company services clients world wide.

<ul><li>Every factory making the most advanced AI chips needs EUV machines, and ASML, a Dutch company, is the only maker.</li><li>It expects to ship about 65 of its standard model this year, its full capacity, and says next year's machines are already close to fully ordered.</li><li>Its output can grow only as fast as its German optics supplier allows, so a chipmaker that wants more must order a year or two ahead, much as a data centre books its grid connection.</li></ul>

Every factory making the most advanced AI chips needs EUV machines, and ASML, a Dutch company, is the only maker.It expects to ship about 65 of its standard model this year, its full capacity, and says next year's machines are already close to fully ordered.Its output can grow only as fast as its German optics supplier allows, so a chipmaker that wants more must order a year or two ahead, much as a data centre books its grid connection.

ASML's EUV machines are booked a year or two ahead, like a grid connection

Micron Technology, Inc., through its subsidiaries, manufactures and markets dynamic random access memory chips (DRAMs), very fast static random access memory chips (SRAMs), Flash Memory, other semiconductor components, and memory modules.

<ul><li>Micron, one of three companies that make the stacked memory beside AI chips, commits most of each year's supply of it before that year starts.</li><li>By Micron's own account, each unit of it uses about three times the silicon of ordinary computer memory.</li><li>So while AI memory grows faster than the rest, it takes silicon away from the ordinary memory in phones, laptops and servers, and keeps that short too.</li></ul>

Micron, one of three companies that make the stacked memory beside AI chips, commits most of each year's supply of it before that year starts.By Micron's own account, each unit of it uses about three times the silicon of ordinary computer memory.So while AI memory grows faster than the rest, it takes silicon away from the ordinary memory in phones, laptops and servers, and keeps that short too.

Micron sells AI memory before the year starts, and each bit takes three times the wafer

Thematic (Sector/Industry)

<ul><li>Nvidia's B200, one of the chips behind today's AI boom, is designed in California but built by dozens of companies in at least five countries.</li><li>Some of those suppliers could be swapped out in months.</li><li>Others would take years, because a replacement needs new factories or years of testing before anyone trusts it.</li></ul>

Nvidia's B200, one of the chips behind today's AI boom, is designed in California but built by dozens of companies in at least five countries.Some of those suppliers could be swapped out in months.Others would take years, because a replacement needs new factories or years of testing before anyone trusts it.

Nobody makes an Nvidia B200 alone, and the weak links are measured in years