AI Supply Chain Buildout
Chris Heatherly@chrisheatherly
−8.0%
since Sep 30
The idea
I believe AI demand keeps building for years, and the payoff spreads across the whole supply chain, not just the obvious chip names. This take splits evenly across four layers, GPUs and compute silicon, memory, copper and raw materials, and energy, pairing steady large-cap anchors with sharper picks in each. A small cash cushion sits ready to add on dips, and I'd rethink this if the buildout stalls rather than just paused.
What it owns
- AI chips need fast memory and large storage capacity, and far fewer companies can supply them at the required speeds and scales. · Micron TechnologyIt manufactures high-bandwidth memory mounted directly onto AI chips, benefiting as servers add more memory capacity per processor., Lam ResearchIt supplies semiconductor manufacturing equipment that memory makers purchase when expanding capacity to feed AI demand., SanDiskIt supplies fast flash storage where AI models and training data live, benefiting as data centers purchase storage faster than industry supply grows., Seagate TechnologyIt manufactures hard drives that store large volumes of data cost-effectively, growing sales as data centers expand storage for AI workloads., Western DigitalIt produces high-capacity drives for data centers and cloud operators, benefiting as the total amount of stored data continues expanding.23%
- The processors that perform AI computations are where demand from data centers shows up first and drives the earliest spending. · NVIDIA CorporationIt produces the GPUs that data center operators prioritize in their purchasing, making it central to whether the AI buildout accelerates., Advanced Micro DevicesIt manufactures AI processors as an alternative to competitors, capturing share if customers want options during a surge in compute demand., Taiwan Semiconductor ManufacturingIt is the sole manufacturer at scale for the world's most advanced chips, including those from all major AI processor makers, making it essential to sustained buildout., BroadcomIt makes custom AI chips and networking systems that cloud companies design themselves, capturing share when buyers build alternatives to standard processors., ASML HoldingIt is the only manufacturer of machines capable of printing the most advanced chips, making it essential to the decade-long expansion of GPU and memory production.23%
- Data centers and the electrical grid upgrades supporting them require vast amounts of copper wiring, and new supply takes years to develop. · Freeport-McMoRanIt operates the largest US-listed copper mines, directly benefiting if data center and grid expansion sustains copper demand growth., Southern CopperIt mines copper at lower costs than most competitors, staying profitable if prices rise during the decade-long infrastructure expansion., Teck ResourcesIt is transitioning toward copper with new mines coming online, positioned to grow output as AI-driven copper demand expands., BHP GroupIt operates large copper mines alongside other metals, providing steady exposure to copper demand while diversifying by commodity., Global X Copper Miners ETFIt holds dozens of copper mining companies, spreading the bet across many producers instead of depending on any single mine's output.23%
- AI data centers run continuously and consume enormous amounts of electricity, creating decade-long revenue streams for power generators and distributors. · Constellation EnergyIt operates the largest US nuclear fleet, which data centers are signing long-term contracts to power their operations continuously., VistraIt owns large power plant fleets in regions where data centers are building fastest, capturing value from both higher electricity prices and long-term capacity contracts., Eaton CorporationIt produces electrical equipment inside data centers that converts grid power for server use, growing its backlog as construction accelerates., NextEra EnergyIt builds the most renewable power capacity in the country, adding supply if electricity demand from AI data centers surges over the decade., GE VernovaIt manufactures the turbines and grid equipment needed to add power generation capacity, benefiting from multi-year orders as demand grows.23%
- Cash8%