The burgeoning field of Artificial Intelligence, seemingly a world away from the realm of physical metals, is creating an unprecedented surge in demand for copper. From complex algorithms running in the cloud to the essential components powering high-performance servers, copper is proving indispensable.
Copper’s Crucial Role in AI Infrastructure
AI servers require robust power supply, rapid data transmission, and efficient heat dissipation to handle intensive computations. Copper, with its exceptional conductivity, plays a vital role in all these areas. While a standard server might use a few kilograms of copper, a high-performance server dedicated to AI training can consume between 15 to 30 kilograms – a threefold to sixfold increase. Furthermore, the adoption of liquid cooling systems, which leverage copper’s superior thermal conductivity, is further driving demand for copper in cooling plates and other heat management components.
Industry Sees Significant Growth
The impact of this demand is already being felt by copper processing companies. In Jiangxi’s Yingtan, a copper processing enterprise is operating its production lines 24/7, with orders booked until the end of the year. The company’s products, primarily used for AI computing power chip liquid cooling plates, have seen a monthly output exceeding 2,000 tons, marking a 30% year-on-year increase in orders.
High-Performance Copper for High-Speed Data
Beyond heat management, the massive data transfer requirements of AI servers place stringent demands on the performance of copper materials. In Anhui’s Chizhou, a company producing ultra-low profile copper foil, essential for high-speed PCBs in AI servers, has achieved surface roughness within 2 micrometers. This advanced copper foil enables a 70% improvement in signal transmission rates compared to traditional copper foil.
Market Trends and Price Hikes
The market for high-end copper foil used in computing power applications has been experiencing a tight supply situation since the fourth quarter of last year. Industry insiders report that since December, the processing fees for certain high-grade copper foils have increased by 30% to 50%. This year, the price of ultra-low profile copper foil, specifically adapted for AI servers and high-speed computing equipment, has risen by approximately 10% to 30%.
Market projections indicate a substantial increase in demand for copper foil specifically for AI servers. It is estimated that by 2026, the demand for high-end copper foil for AI servers will reach approximately 24,000 tons, a remarkable year-on-year increase of about 260%. This trend signifies not only an overall rise in copper consumption due to growing computing power but also a concentration of demand towards copper materials with high thermal conductivity, high frequency and speed capabilities, and high precision.
Understanding Ultra-Low Profile Copper Foil
Ultra-low profile (ULP) or very low profile (VLP) copper foil has become a critical material for high-speed PCBs in AI servers due to its ability to mitigate the ‘skin effect’ in high-frequency signal transmission. The skin effect causes signal currents to concentrate on the surface layer of a conductor. A rougher copper foil surface leads to greater signal transmission loss. ULP copper foil utilizes a specialized electrolytic process to achieve a surface roughness (Rz) below 1.5μm to 3μm, significantly reducing signal attenuation compared to standard copper foil. This makes it the standard material for high-speed copper clad laminates of M7/M8 grade.
Long-Term Outlook and Global Impact
Looking further ahead, market estimates suggest that global demand for high-end copper foil for AI servers could reach approximately 50,000 tons by 2027 and potentially exceed 110,000 tons by 2030. Morgan Stanley forecasts that global data center copper demand will double to 1.3 million tons by 2028, with incremental demand stemming not only from AI servers themselves but also from liquid cooling systems, high-speed connectors, and power supply infrastructure.
The strength of copper prices this year reflects these growing demands. The LME 3-month copper futures price has climbed over 14% year-to-date, surpassing $14,000 per ton in mid-August. In China, the main Shanghai copper futures contract saw its price surge from around 86,000 yuan per ton at the start of the year to nearly 109,000 yuan per ton.
