Global technology giant Siemens is doubling down on its commitment to bolster high-growth sectors in the U.S., including data centers, batteries, semiconductors, EV charging and rail transportation.
The company unveiled a $150 million investment in a manufacturing facility in Dallas-Fort Worth, designed to produce critical electrical infrastructure equipment.
The Fort Worth facility, alongside other advancements, will integrate Siemens’ advanced manufacturing tools, including digital twin technology and high-tech automation.
“The plant will manufacture low-voltage switchboards which are key components in the electrification of critical infrastructure sites, including data centers,” explains Siemen Smart Infrastructure’s head of electrical products for North America, Barry Powell.
The investment aims to fuel the growth of U.S. data centers, driven by the surge in generative AI adoption, and secure the operation of critical infrastructure.
Anticipated to begin production in 2024, the facility will play a pivotal role in meeting the projected 10% annual growth in data center demand through 2030.
“We’re seeing exponential growth of U.S. data centers driven by the adoption of generative AI and it’s the power distribution products, such as the ones being built at our new Fort Worth plant, that will enable this growth while ensuring the secure operation of critical infrastructure,” Powell says.
The investment is part of Siemens’ broader commitment to the U.S., which also includes a previously announced $220 million investment in a rail manufacturing facility in Lexington, North Carolina.
Siemens is also expanding its electrical-products manufacturing plants in Grand Prairie, Texas, and Pomona, California.
“We’re utilizing digital twin technology and high-tech automation to ensure the highest quality, efficiency and sustainability levels,” Powell says. “The Xcelerator portfolio will be used to capture and analyze data from the shopfloor on production and product performance in real time.”
Cumulatively, these initiatives contribute to Siemens’ $510 million investment in the U.S. for the year, creating approximately 1,700 jobs, and aligning with its $2.15 billion global strategy unveiled in June.
The expanded facilities will cater to the surging demand for electrification in critical infrastructure, covering areas like data centers, battery plants, semiconductor facilities and EV charging.
The company’s strategic initiative encompasses high-tech factories, innovation labs and education centers, emphasizing Siemens’ commitment to digitalization, automation, electrification and sustainability.
Powell explains Siemens is using AI in many different areas to improve efficiency and speed to market.
“Areas such as production scheduling, engineering and programming are some of the many potential use cases we anticipate implementing,” he says.
Several of the company’s new or expanding manufacturing facilities, including the one in Fort Worth, will be built and operated using Siemens advanced manufacturing tools.
Federal government investment in infrastructure, manufacturing and climate is now accelerating the growth of many critical sectors such as battery development and semiconductor manufacturing.
“It’s sending a strong signal to the private sector – and Siemens is among the companies investing to ensure we deliver what our customers need in this moment,” Powell says.
From the perspective of Bobby Rogers, vice president of strategic account sales for Schneider Electric’s secure power division, there’s been an “unprecedented acceleration” in the development of AI applications, which is quickly transforming the way people interact, live and work.
He explains the data requirements associated with AI, like large training clusters and small edge inference servers, are driving new server and chip technologies resulting in extreme rack power densities in data centers.
“This has created new data center challenges across power, cooling and software management,” Rogers says.
As a result, AI start-ups, enterprises, colocation providers and internet giants must now consider the impact of these densities on the design and management of the data center physical infrastructure.
He notes AI is becoming a larger percentage of data center workloads, representing a shift to higher rack power densities.
Schneider Electric estimates AI represents 4.3 gigawatt (GW) of power demand in data centers today and projects this will grow at a compound annual growth rate (CAGR) of 26% to 36%, resulting in a total demand of 13.5 GW to 20 GW by 2028.
“This growth is two to three times that of overall data center power demand growth rate,” Rogers says. “This means that AI will likely cause data center power requirements to skyrocket.”
He adds there needs to be more investments in data center supply chains because the current process simply can’t keep pace with demand.
“Data center demand was already dramatically outpacing data center capacity before AI entered the picture,” he notes. “Today, AI is amplifying this challenge exponentially.”
Between sourcing land to build a data center facility on, constructing the shell, procuring the utility power requirements and then supplying the facility with the right servers, uninterruptible power supply (UPS) solutions, cooling systems, and more, it simply takes too long.
“If we keep operating on the current timelines for deploying traditional data centers, the industry will not be able to keep up with the increasing need for high-powered data processing that AI brings,” Rogers cautions.