Supply Chain Issues in Data Center Construction: Current PCX Insights

Last November, we shared our insights into the supply chain crisis and its effects on the timeline of a modular data center (MDC) build. Supply chain issues are ongoing, so we wanted to revisit this topic to provide updated lead time estimates and our current outlook. Multiple years into this difficult situation, it’s abundantly clear that waiting it out is not an option—data center vendors and operators need solid strategies to overcome supply chain obstacles and keep up with demand. 

Are we still in a supply chain crisis?

The supply chain crisis is still a very present issue for data center vendors and operators. In a recent Uptime Institute survey, more than 75 percent of respondents (including data center owners, vendors and colo providers) said they experienced supply chain issues in the past 18 months. 

What are the major supply chain issues? In short, data center demand continues to increase, and the capacity to fill orders across the industry isn’t keeping up. Mission-critical materials, components and skilled labor are in short supply. Supply chain disruptions are typically felt more keenly by vendors than data center operators because they are higher up the value chain. However, these challenges have a ripple effect felt at every level.

Although the situation is still difficult, the good news is that it’s improving in some respects. PCX has begun to have less trouble sourcing some raw materials, such as steel and copper. In the Uptime Institute survey, only 11 percent of data center operators say their supply chain experience has worsened over the past six months. The most popular answer among these respondents (43 percent) was that the supply chain has slowly improved. 

How are lead times looking in 2023?

Many critical data center components are characterized by long lead times—even longer than last year. In November 2022, we shared our current estimates on some of these components. Today, we’re seeing some lead times remain about the same, with others having increased considerably.

Copper busway, for example, is now taking 20 weeks or more. Lighting panel boards, which are used in our FLX-Power™ units, require a lead time of 30 weeks. Switchboards can take at least 40 weeks. 

According to data center owners and operators, the equipment most affected by supply chain disruptions include computer room cooling units, uninterruptible power supply (UPS) systems, power distribution units and components, emergency generators and switchgear (in that order).

How is the data center industry navigating the supply chain crisis?

Throughout the industry, data center stakeholders are finding ways to cope with supply chain challenges. 

• Keep expectations realistic: It’s important to remain aware of the current challenges the market is facing and adjust expectations accordingly. This should also involve developing reasonable project timelines that account for longer lead times.
• Start planning early: For companies undertaking new data center projects, planning and engaging with data center providers early in the process is one of the best ways to mitigate supply-chain-related delays. Take a proactive approach with your data center manufacturer to find ways to speed up deployment time.
• Remain agile: If a certain component or supplier is creating a bottleneck in your supply chain, you may be able to move the project forward by finding a substitute. A vendor-agnostic data center provider like PCX can help you find quality components and raw materials from various sources.
• Choose modular construction: MDCs offer real advantages in overcoming supply chain challenges. Compared to traditional data center construction projects, modular builds come with more predictable costs, faster deployment time and greater flexibility. 

What does the future hold?

As we look to the future, it’s becoming increasingly clear that there may not be a transition back to before the pandemic and the long-term supply chain crisis. It could take another 24-36 months before we achieve a functional supply chain without shortages and delays. 

Despite ongoing obstacles, the industry continues to innovate and find ways to keep up with demand. One way of doing this is through modular data center construction. MDCs and modular skids are valuable solutions for speeding up deployment time and achieving more predictable timelines and costs. 

To learn more about the process of building an MDC, check out our infographic, “What to Expect During a Modular Data Center Project.”