Datacenter batteries are selling out years in advance, because AI, says Panasonic

Summary

Major memory makers have already sold all the kit they can make this year, creating shortages and price increases. Datacenter infrastructure buyers may soon face the same issues when trying to get their hands on backup batteries. Japanese giant Panasonic on Wednesday outlined its plans to triple production capacity for lithium-ion cells at its Japanese factories by expanding existing facilities and adapting some of its automotive manufacturing facilities to make batteries. The company is also considering adapting its Kansas plant to make more datacenter batteries. The reason for this push is AI, which Panasonic notes is stoking demand for servers and therefore also for sources of backup power. The Japanese company therefore thinks that by 2029 it can sell ¥800 billion (US$5 billion) of batteries in its 2029 financial year, roughly quadrupling its current sales. Panasonic claims customers have already agreed to buy around 80 percent of the products it will need to reach that target, and to enjoy 80 percent market share. That leaves buyers who aren’t already Panasonic customers bidding for a fifth of its output – assuming it can scale production as planned – even as they scale AI infrastructure. Panasonic puts its batteries into rack-mounted units designed to sit among servers and other compute infrastructure and keep them operating for a few minutes – so they’re basically uninterruptible power supplies. The company’s kit can also be used to store energy and release it when energy prices spike, to help reduce power bills. The company is also working on supercapacitors as a source of backup energy. Designers of electronic products use conventional capacitors as a reservoir of energy that’s needed ASAP. Camera flashes are the classic use for a capacitor, and the devices suit that role because they store a little energy and discharge it rapidly. Supercapacitors can store more energy and deliver it more slowly. They’re also a denser energy storage medium than batteries. P...