Executive summary
Globally, there are over 10,500 data centres in operation, including more than 1,000 hyperscale facilities. The United States leads the charge, hosting over half of these data centres and adding 5,000 new ones in just seven years – an astonishing compound annual growth rate (CAGR) of 44%.
This rapid expansion of data centres, driven by surging demand for cloud services, artificial intelligence, Industry 4.0 and cryptocurrency mining, is creating unprecedented opportunities and challenges in power efficiency and sustainability.
According to the International Energy Agency, data centres consumed 460 terawatt hours (TWh) globally in 2022, and the consumption could surpass 1,000 TWh by 2026.
This report examines how wide bandgap (WBG) compound semiconductors can improve the efficiency of power distribution networks in data centres and help mitigate the anticipated surge in energy demand.
WBG compound semiconductors, such as silicon carbide (SiC) and gallium nitride (GaN), are emerging as transformative technologies, offering superior efficiency, better thermal management and compact designs.
It has been reported that adopting GaN technology in data centres can reduce electricity use by up to 10%, translating to $1.9 billion in annual cost savings, over 15 TWh of energy savings, and a 10-million-ton reduction in CO2 emissions.
WBG adoption is critical for key systems within data centres, including server power supply units (PSUs), uninterruptible power supplies (UPSs) and solid-state transformers (SSTs). Embracing these advancements will enable sustainable growth in the data centre sector and contribute significantly to achieving global Net Zero goals.
Our analysis suggests that the PSU market in the four major data centre hubs – the US, China, the UK and Germany – has the potential to exceed $7.5 billion over the next seven years. Meanwhile, the UPS market is forecasted to reach a valuation of over $4.2 billion by 2030, highlighting significant growth opportunities in power infrastructure for data centres.
The UK data centre industry has seen a consistent flow of investments. Since the current government took office, total investments have surpassed £25 billion, underscoring a strong partnership between the government and the technology sector.
With over 500 data centres and robust engineering and compound semiconductor expertise, the UK is well-positioned to lead in advancing WBG technologies. CSA Catapult plays a pivotal role in this innovation landscape, providing world-class capabilities in advanced power electronics design, simulation, optimisation and rapid prototyping.
Data centres and energy demand
There are over 10,500 data centres operating worldwide. These data centres can be categorised based on their size and capacity. Enterprise data centres typically house a dozen to a few hundred servers and support the needs of individual businesses or organisations. Hyperscale data centres are much larger, containing tens of thousands to hundreds of thousands of servers. These hyperscale centres support massive cloud service providers and handle large-scale data processing and storage needs. There are over 1,000 hyperscale data centres globally.
Figure 1(b) illustrates the distribution of data centres by country. The US accounted for half of the global data centres, followed by Germany and the UK, each with 5%, and China with 4%. The Netherlands, Australia, Canada and France also each had 3% of the total data centres.
According to the International Energy Agency, data centres consumed 460 terawatt hours (TWh) globally in 2022, and the consumption could surpass 1,000 TWh by 2026.
Data centre power consumption varies significantly based on their size and capacity. An average enterprise data centre typically consumes around 3 megawatts (MW) of electricity (estimated based on data on the number of data centres from Statista and data centre energy consumption from the International Energy Agency). In contrast, an average hyperscale data centre, which supports major cloud service providers and large-scale data processing, can require 20–50 MW.
Data centre growth surge: forecast to 2031
Between 2017 and 2024, the number of data centres in the US expanded significantly, growing at a compound annual growth rate (CAGR) of 44% to exceed 5,300. This reflected significant investments in cloud infrastructure and the rising demand for data processing capabilities. In the US, there are several factors driving this growth, including the availability of vast expanses of land and resources, and tax incentives, making the country a favourable location for expansion.
China also saw substantial growth, achieving a CAGR of approximately 13% and reaching 450 data centres, driven by its rapid digitalisation and extensive adoption of cloud services. In contrast, Germany and the UK experienced more moderate increases, with CAGRs of around 6% and 3%, respectively, during the same period, bringing their total number of data centres to over 500 each.
If the growth rates observed over the past seven years continue, the number of data centres in the US could increase tenfold by 2031. Similarly, China's data centre count could double in the next seven years. In Europe, Germany could see its number of data centres reach around 800, while the UK could reach more than 600 in the same period.
However, in a more realistic scenario, assuming a 10% CAGR for both the US and China during 2024–2031, the expansion would be more measured. Under these conditions, the US could approach approximately 10,500 data centres, reflecting a continued but more moderate increase in data infrastructure. China could see its data centre numbers grow to 875, maintaining strong but sustainable growth in response to ongoing digital trends and economic development. Germany and the UK, growing at modest CAGRs of 3% and 1.5% respectively, could see their numbers grow to around 600.
Data centre energy efficiency
Power Usage Effectiveness (PUE) is a critical metric for assessing the energy efficiency of data centres. It represents the ratio of total facility energy consumption to the energy used specifically by IT equipment, such as servers, storage and networking gear. By highlighting how much energy is consumed by supporting systems like cooling, lighting and other non-IT infrastructure, PUE measures how effectively a data centre utilises energy to power its core operations.
The PUE dropped significantly from 2.5 in 2007 to 1.65 in 2013, driven by advances in cooling methods like air containment and overall increased energy awareness in the data centre industry, leading to optimised operations.9 However, progress stalled over the next decade, with the average PUE in large-scale data centres remaining around 1.6. This stagnation can be attributed to factors such as the high capital costs of further improvements and rising ambient temperatures that strain cooling systems. Additionally, increased heat generation from higher server densities and ageing chips offset efficiency gains.
Newer data centres are operating more efficiently, with some reaching an impressive PUE of 1.3. Industry leaders like Google and Meta are setting new standards for energy efficiency. Google reports an average PUE of 1.1 across its data centres, with its most efficient facility reaching a PUE of 1.06. Similarly, Meta has achieved an average PUE of 1.09 in its data centres.
Optimising power efficiency: how WBG technology can transform data centres
Enhancing the efficiency of power electronics through the integration of WBG compound semiconductors in data centres will contribute to lowering the PUE. WBG semiconductors, such as silicon carbide (SiC) and gallium nitride (GaN), offer superior performance compared to traditional silicon-based electronics. They operate at higher voltages, frequencies and temperatures, which translates to reduced energy losses and improved power conversion efficiency. This can help reduce the overall PUE and support the sustainability goals by decreasing the environmental impact of data centre operations.
The adoption of WBG compound semiconductors in data centre power systems is expected to be driven by stringent regulations and the need for superior performance. Regulatory frameworks like the UK's Net Zero commitment and the EU's 'Lot 9' policies mandate higher energy efficiency, pushing data centres to adopt advanced technologies. Compound semiconductors offer significant benefits such as higher power density, faster switching and better thermal management, which enhance performance while reducing energy consumption and operational costs.
Sustainability and the need for smaller form factors further boost the adoption of compound semiconductors. With data centre power consumption expected to surge and the number of data centres projected to double in the next seven years, these semiconductors enable more efficient and compact power systems. Their integration supports the construction of sustainable, space-efficient data centres, meeting growing demand without expanding physical infrastructure and aligning with global sustainability goals.
