The rapid rise in copper prices has hit the Asia-Pacific region harder than other parts of the world. As AI and data centers continue to expand across the region, demand for essential resources has intensified.
Copper plays a critical role in power delivery, cabling, and cooling systems, making it indispensable for every data center development.
Despite rising costs, the growth of AI and data centers is unlikely to slow down. However, the sustained high demand, combined with the gradual depletion of resources, may lead to delays in the construction of new data centers.
Can Copper Keep Up with Asia’s AI Boom?
Asia’s rapid expansion of AI infrastructure is driving unprecedented demand for copper. AI infrastructure, especially hyperscale data centers, are the big consumers of copper, usually used for cabling and interconnects.
Analysts note that although copper prices continue to rise, this is unlikely to slow down the overall growth of regional data centers.
However, it may contribute to delays in the construction of new AI facilities. While some companies may explore alternative metals, copper is expected to remain a critical constraint particularly at the power layer, making it a key bottleneck in the development process.
Aluminum Offers Relief, but Copper Remains Critical
Copper is essential for electrification and digital transformation, copper shortages could slow down AI adoptions and data center expansions, creating bottlenecks for the region’s digital economy.
Aluminum is a cheaper alternative to copper, but its lower conductivity means it often requires larger or thicker components. As a result, while some hyperscale data centers may consider substituting copper with aluminum, this is typically limited to specific use cases.
Alex Ho, an ALS trader at CMC Markets Singapore, noted that data center developers could save more than 30 percent by switching from copper to aluminum in certain applications.
However, he emphasized that structured cabling and high-density interconnects should still be made of copper, as aluminum does not meet the required compliance standards or reliability needs for critical data center systems.
Copper: Still the Backbone, Still the Limit
Due to copper’s superior conductivity, heat tolerance and mechanical strength it does meet the required compliance standard, making it irreplaceable.
Developers may continue to use aluminum for non-critical areas to manage cost, but overall copper will remain the dominant item.
Asia’s AI growth hinges on copper, making it both a technological enabler and a potential constraint. Copper has become both a cornerstone and a bottleneck of the AI era.
As demand continues to rise, AI data centers must be strategically planned and continuously innovated to manage resource limitations and sustain long-term growth.
