Link: Mitsubishi Electric fights to keep up with AI data center demand

Mitsubishi Electric is seeing a surge in global demand for optical components used in AI-operated data centers, struggling to keep up. The Tokyo-based automation powerhouse, a key supplier of optic fiber communication devices, attributes this intense demand to AI's need for high-speed, high-volume computations.

These devices from Mitsubishi Electric, renowned for low power consumption and heat emission, have witnessed skyrocketing sales. A 50% rise in production capacity for optical devices is slated for next month, however, this will not satisfy the overwhelming demand according to Masayoshi Takemi, an executive at Mitsubishi.

"To meet the strong level of inquiries we’re getting, we may need double the production capacity by September," states Takemi. Mitsubishi Electric's monopoly over nearly half of the global market for optical transmission devices in data centers further pushes the unmet demand.

"All U.S. 'hyperscalers' are Mitsubishi Electric customers,” claims Takemi, signaling the presence of a vast market in the United States, home to leading hyperscalers like Amazon.com, Microsoft, and Apple. Even as investors grapple with evaluating the technology's impact on future sales, companies show unwavering interest in AI infrastructure.

Research by LightCounting reveals that next-gen data centers operate at speeds of 800 gigabits per second to 1.6 terabits per second, a significant leap from the previous 400 gigabits per second. The optical devices segment, though a tiny part of Mitsubishi’s business spanning from factory robots to satellite equipment, is increasingly gaining significance.

In terms of Japan’s power chip sector, where Mitsubishi competes with domestic rivals Rohm and Toshiba, Takemi did not express any immediate need for consolidation, despite increasing production and subsidies from their competitor, China. Japan is bolstering its support to boost chip production, but fears loom about falling behind in a fragmented market.  #

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