Expansion of AI Data Centers Drives Demand for Erbium and Yttrium, with China's Supply Chain Taking the Lead
17 hour ago / Read about 0 minute
Author:小编   

Amid the expansion of AI data centers, the roles of erbium and yttrium, two minor metals, have become increasingly prominent. Erbium, a heavy rare earth element in the lanthanide series, is used to manufacture Erbium-Doped Fiber Amplifiers (EDFAs), which directly amplify optical signals in long-distance optical communications, meeting the demands of modern long-distance optical networks. As computing power is deployed across regions, the demand for erbium continues to grow. Although yttrium does not belong to the lanthanide series, it is also classified as a rare earth element. In the form of Yttria-Stabilized Zirconia (YSZ), it serves as a thermal barrier coating for gas turbines, enhancing their heat resistance and power generation efficiency. With the rising electricity demand from data centers, the demand for gas turbines has also increased, subsequently driving the demand for yttrium. China virtually monopolizes the production of these two minor metals and holds a significant advantage in the industrial capacity for their separation and purification. Given the relatively small market size and concentrated supply of these two minor metals, the expansion of AI data centers could bring about significant marginal changes. However, they are not entirely irreplaceable, so the actual increase in demand remains to be seen.