AI Data Center Boom Sparks Fierce Competition with Auto Industry for Chips, Batteries, and Power

A global surge in AI data center construction is triggering a fierce competition for resources with the automotive manufacturing sector. UBS has warned that soaring AI-driven demand for high-end memory chips (DRAM) will squeeze capacity allocated to automotive semiconductors, potentially disrupting vehicle production starting from Q2 2024—particularly impacting automakers reliant on advanced driver-assistance systems (ADAS). Meanwhile, data centers are driving up demand for battery energy storage systems (ESS), prompting South Korean battery makers to shift toward lithium iron phosphate (LFP) technology, which could disrupt the supply chain for electric vehicle (EV) batteries. Additionally, both AI data centers and EVs are significantly increasing electricity demand, creating direct competition in regions where grid upgrades lag behind. This multifaceted supply chain battle—spanning semiconductors, batteries, and power—marks just the beginning of a deep collision between two pillar industries amid their digital transformation.