Power and thermal management equipment essential to building datacenters is in short supply, with delays of months on shipments – a situation that’s likely to persist well into 2023, Dell’Oro Group reports.
The analyst firm’s latest datacenter physical infrastructure report – which tracks an array of basic but essential components such as uninterruptible power supplies (UPS), thermal management systems, IT racks, and power distribution units – found that manufacturers’ shipments accounted for just one to two percent of datacenter physical infrastructure revenue growth during the first quarter.
“Unit shipments, for the most part, were flat to low single-digit growth,” Dell’Oro analyst Lucas Beran told The Register.
He blamed challenging supply chain conditions and strong demand from hyperscalers – which are expected to open at least 30 additional regions this year – for the delays.
Customers hoping to get their hands on what Beran calls long-sales-cycle products – large centralized, three-phase UPSes, thermal management, and cabinet power distribution systems, for example – may have to wait between six months and a year before they even ship.
And the story isn’t much better for products that are typically readily available. Things like single-phase UPSes, rack power distribution units, and IT racks have seen lead times slip to between four and six weeks depending on the vendor.
“Supply chain disruptions aren’t going away by any means,” Beran said, adding that while he does expect a higher volume of unit shipments in the second half of 2022, the improvement is likely to be marginal.
A liquid cooling bright spot
While supply remains challenged, Beran notes that some emerging technologies are gaining momentum.
He expects liquid and immersion cooling to see robust growth over the next few years as customers warm up to the tech. While liquid and immersion cooling combined accounted for just five percent of total thermal-management spending in 2021, it’s a market that’s growing rapidly – up roughly 50 percent from the prior year.
What’s more, interest in the technologies is at an all-time high, accelerated by investments by large OEMs and chipmakers. Last month, Intel announced a $700 million lab in Oregon to develop novel liquid cooling technologies.
“When Intel throws their weight behind something like that, and not just a little something, but $700 million – close to a billion dollars – that is a pretty large signal to the datacenter ecosystem that this is a serious technology,” Beran said.
Inflation hits datacenter physical infrastructure market
Despite the stark supply chain forecast for datacenter physical infrastructure, the sector’s revenues surged six percent year-over-year in Q1 as pent-up demand was met with higher per-unit costs.
“When I look at datacenter physical infrastructure as a whole … four to five percent of that was driven by price increases,” Beran observed, adding that vendors are passing higher costs on to channel partners and customers.
The majority of this growth was realized in the North American, Asia Pacific, and Chinese markets, where Eaton Riello and Schneider Electric gained the largest shares during the quarter.
Short-sales-cycle products like single-phase UPS bore the brunt of inflationary pricing pressures during the quarter, according to Beran, who expects higher pricing to begin hitting longer-sales-cycle products in early 2023.
Looking ahead, Beran predicts datacenter physical infrastructure revenues will grow nine percent in full-year 2022, as improving supply chain conditions in the second half of 2022 are met with higher prices.
This growth will be fueled, in large part, by a surge of hyperscale and cloud spending this year. The analyst firm predicts cloud providers will spend upwards of 25 percent more – to $18 billion – on datacenter infrastructure in 2022 following record investments in Q1. ®