Critical Minerals in the Data Center

by B Walter
Oct 01, 2025

Critical Minerals in the Data Center

How Rare Earths and Specialty Metals Shape Network Infrastructure

Summary:

The modern datacenter relies on more than just silicon. It runs on critical minerals — a group of rare and specialty materials that power everything from fan motors to optical lasers to backup systems. As demand rises and supply chains tighten, it’s time to understand where these materials show up in your networking stack—and how vendors like TFO can stay ahead.

Where Critical Minerals Show Up in Your Stack:

1. Cooling Fans, HDDs, and Motors
Strong magnets inside fans and hard drives use rare earths like neodymium and dysprosium. These are hard to mine, expensive to refine, and vulnerable to trade disruption.
Source: https://www.metal.com/en/newscontent/103259776

2. UPS and Battery Backup Systems
Data centers rely on lithium, cobalt, and nickel in their backup batteries. AI-driven infrastructure is scaling this demand fast.
Source: https://impossiblemetals.com/blog/powering-ai-the-critical-mineral-demands-of-emerging-data-centers/

3. Optical Components and Transceivers
Laser diodes, amplifiers, and specialty coatings inside transceivers often require indium, gallium, and germanium. These are on most critical minerals lists worldwide.
Source: https://www.sfa-oxford.com/knowledge-and-insights/critical-minerals-in-low-carbon-and-future-technologies/critical-minerals-in-artificial-intelligence/

4. Semiconductors, DACs, DSPs
High-speed optical modules (like TFO’s 100G & 400G) rely on chipsets and components with gallium arsenide (GaAs), tantalum, and other rare inputs.
Source: https://www.sfa-oxford.com/knowledge-and-insights/critical-minerals-in-low-carbon-and-future-technologies/critical-minerals-in-electronics/critical-minerals-in-data-transmission-networks/

Strategic Pressure Points

Geopolitical Concentration: Over 85% of rare earth processing happens in China. A trade shock could freeze supply.
Price Volatility: Lithium, cobalt, and gallium prices spike when inventories fall or mines close.
Policy Changes: The U.S., EU, and allies are rewriting critical mineral strategies—with incentives for reshoring and penalties for certain imports.
Environmental Pressure: End-users (especially governments and hyperscalers) want “ethical” sourcing and sustainable recovery of rare materials.