The Knowledge
AI data center boom is leaving consumer electronics short of chips − even though they don’t use the same kinds
Vidya Mani, University of Virginia; Cornell University
The boom in data center construction is taking up much of the supply of high-tech components, especially processor and memory chips. This demand is squeezing consumer device makers, which are having trouble acquiring enough chips.
This is happening even though data center servers and smartphones use different types of chips. The key distinction between consumer electronics and data centers is what they need chips to be optimized for. Smartphones and PCs require low power use, thermal efficiency and tight integration. Data centers that run AI systems such as large language models, or LLMs, require maximum compute power, memory bandwidth and storage throughput.
To meet these needs, consumer devices tend to rely on systems-on-a-chip – chips that combine processing and storage – with dynamic random access memory, or DRAM, and NAND, a type of nonvolatile memory. In contrast, AI servers rely on graphics processing units, or GPUs, or other accelerator processors combined with high-bandwidth memory chips.
I study global supply chains and how businesses respond to market constraints within these supply chains. The reason for the consumer electronics supply crunch has to do with the nature of the chip market: its concentration and high costs and how it responds to boom-and-bust cycles.
AI is not replacing consumer electronics; it is reorganizing the chip market around new priorities for specific chip characteristics. Data centers are pulling capital and scarce memory capacity toward the production of accelerator processors and high-bandwidth memory and the data handling and electronics equipment that surround them. https://www.youtube.com/embed/IkRXpFIRUl4?wmode=transparent&start=0 Chipmaking explained.
A winner-takes-most industry
Chip manufacturing behaves less like a competitive commodity market and more like a layered oligopoly. Scale matters because the leading firms can reinvest in research, improve yields, secure equipment and deepen customer relationships. In the case of graphics processor chips, designers such as NVIDIA, which has 85% market share, depend on advanced semiconductor foundries such as TSMC, which has more than 70% market share, to manufacture chips using extreme ultraviolet lithography machines from ASML, a monopoly.
A small number of producers both design and manufacture memory chips. Currently, three companies – Samsung, Micron and SK Hynix – hold a majority market share in the memory chips market. Long development cycles, extremely high fixed costs and the need for technological leadership reinforce concentration over time.
Consumer electronics firms such as Apple, along with other technology firms such as Amazon, Google, Microsoft and Xiaomi, increasingly design their own processor chips, because these chips shape the user experience, AI performance, power efficiency and system-level differentiation. Manufacturing memory chips, by contrast, is extraordinarily capital-intensive; requires high precision, efficiency and production line utilization; and is dominated by a few incumbent suppliers.
Since 2000, the memory chip industry has moved through repeated cycles of overcapacity and undersupply: the post-dot-com collapse, the 2007-09 glut, the tighter 2010s after consolidation, the severe 2022-23 downturn, and the AI-driven tightness of 2024-25. This has led to high levels of concentration in the industry and chipmakers that are hesitant to add capacity. Producers often operate chip fabrication plants, or fabs, at or near capacity due to high fixed costs. The risk of having expensive facilities go underused keeps chipmakers from bringing new fabs online in lockstep with demand increases.
Consolidation has reduced the number of major suppliers, who now increasingly direct investment toward higher-margin products rather than broadly adding capacity. That shift is important for understanding why AI demand is tightening chip supplies even as demand for consumer electronics continues to grow. https://www.youtube.com/embed/1JkzrR-hznE?wmode=transparent&start=0 The most advanced computer chips are made with a machine manufactured by one Dutch company.
How the AI data center boom redirects capacity
The AI boom has changed memory demand from a broad consumer cycle into a more segmented market centered on high-bandwidth memory chips. In 2023, Micron cut capital spending and the company’s fabs operated below levels needed to justify their cost. By 2026, however, Micron was reporting strong AI demand, record data center DRAM revenue and rapidly rising high-bandwidth memory sales.
This shift matters because the market for supplying memory cannot respond quickly. Opening new fabs requires years of planning, large capital commitments and investments in advanced process equipment and skills. Memory chip manufacturers are likely to remain cautious about expanding capacity even as their profitability improves, with 2026 spending focused more on technology upgrades and high-value products than on large increases in chip supply.
In practical terms, AI is not simply lifting all memory demand equally; it is redirecting scarce capacity toward massive, or hyperscale, data centers and server markets first.
Can consumer electronics catch up?
Consumer electronics can catch up, assuming the manufacturers can weather the cost increases from tariffs and geopolitical pressures. One way they could is by making investments to enable small AI language models to run on consumer devices, a move analysts expect the companies to attempt.
Apple shifted a growing share of U.S.-bound iPhone production out of China to India and moved much of its iPad, Mac, Apple Watch and AirPods assembly for the U.S. market to Vietnam to lower the company’s tariff burden. Yet relocation does not eliminate cost pressure. Manufacturing iPhones in India still costs roughly 5% to 8% more than in China, and in some cases closer to 10%, because supplier ecosystems, logistics and production efficiency remain stronger in China.
Rising geopolitical tensions between the United States and China led to supply constraints and export controls on critical minerals and chip components, raising input costs for consumer electronics manufacturers. This led to higher total import costs and reduced margins for firms unable to pass costs fully to consumers, leading to further consolidation in supply.
Consumer devices do not need to replicate data center infrastructure to offer AI on their products. Their opportunity lies in running small language models on-device for summarization, rewriting, search, assistance and lightweight reasoning. Doing so, however, creates a distinct hardware requirement. Phones and laptops need to incorporate multiple functions on the same chip, combining processing capability with fast local memory and enough storage to keep on-device AI responsive. Apple’s current device requirements for the company’s AI, Apple Intelligence, also show that older phones often lack the compute power and memory needed for useful on-device AI.
To adopt AI, device makers need to redesign their products with higher-end chips – both processors and memory – that can piggyback on the AI model-oriented growth in the chips market driven by the data center boom. Such a shift by the device makers could also provide a useful backstop for the memory chipmakers in case the projected AI and data center growth does not materialize in the medium to long term, a boom-and-bust cycle that memory chipmakers have had to endure many times in the past.
What this means for the wider economy
The AI and data center boom is redistributing capital, supplier attention and pricing power across the broader economy. Sectors with limited purchasing leverage are especially vulnerable when chip supplies tighten. For example, medical technology accounts for less than 1% of the overall chip market, leaving essential equipment manufacturers exposed during shortages.
In contrast, sectors linked to power delivery and digital infrastructure may benefit from the boom because they try to keep up with demand for cloud services and electrification. The International Energy Agency estimates that data centers consumed about 415 TWh of electricity in 2024 and notes that AI is accelerating the deployment of high-performance servers, which implies stronger demand for the grid, storage, cooling and networking equipment around them.
For the consumer electronics industry, the strategic task is not to try to match the AI data centers chip for chip but to build differentiated, energy-efficient, on-device AI services while managing higher supply chain and tariff risks.
And for consumers looking to buy phones, games and laptops, because of high demand from data centers, the next few years are likely to bring higher prices, shortages and delayed product releases.
Vidya Mani, Associate Professor of Business Administration, University of Virginia; Cornell University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Forgotten Genius Fridays
Alexander Miles: The Black Inventor Who Helped Make Elevators Safer
In 1887, Black inventor Alexander Miles patented an improved mechanism for operating elevator car and shaft doors, helping make elevator travel safer and more convenient.
Elevators transformed American cities, allowing buildings to rise higher and making upper floors more accessible. But early elevator travel carried a serious danger: doors had to be opened and closed manually, and an elevator shaft could remain exposed if someone failed to secure it properly.
Alexander Miles, a Black inventor, barber and businessman, developed an innovative solution. His patented mechanism helped elevators operate their car and shaft doors automatically, making elevator travel safer and more convenient.
The danger of early elevators
By the late 19th century, elevators were appearing in hotels, offices and other multistory buildings. Although they made vertical travel easier, many depended on operators or passengers to close the doors manually.
A carelessly opened shaft door could expose an empty elevator shaft. Miles recognized that elevator safety could not always depend on someone remembering to close every door.
He designed a system that connected the movement of the elevator car with the operation of its doors.
Alexander Miles’ elevator innovation
On October 11, 1887, Miles received U.S. Patent No. 371,207 for what he described as “new and useful improvements in elevators.”
His design addressed two related problems. It provided a way to close shaft openings above and below the elevator car, and it allowed the movement of the car to help open and close the elevator doors at the appropriate floor.
Miles’s mechanism used a flexible belt attached to the elevator car, along with drums positioned at the top and bottom of the shaft. A system of levers, rollers and specially designed grooves helped control the car and shaft doors as the elevator moved.
The goal was straightforward but potentially lifesaving: prevent elevator-shaft openings from being left unprotected because of human negligence.
Did Alexander Miles invent the elevator door?
Alexander Miles is sometimes described as the inventor of the automatic elevator door. The complete history is more complicated.
John W. Meaker received a patent for an earlier automatic elevator-door mechanism in 1874, approximately 13 years before Miles received his patent. Therefore, Miles should not be credited with inventing the first automatic elevator door.
What Miles did was develop and patent his own important improvement to the way elevator car and shaft doors operated. His design advanced the effort to make elevators safer, more reliable and easier to use.
Recognizing that distinction does not diminish his accomplishment. Invention is often a continuing process in which engineers and innovators improve existing technology. Miles contributed a valuable new solution to a dangerous problem.
More than an inventor
Born in 1838, Alexander Miles built a successful life during an era when Black Americans faced severe restrictions on economic opportunity.
Miles worked as a barber before establishing himself in Duluth, Minnesota. He operated a barbershop in the city’s St. Louis Hotel and invested in real estate. He also became the first Black member of the Duluth Chamber of Commerce.
His achievements extended beyond mechanical invention. In Chicago, Miles later established the United Brotherhood, an organization intended to provide life insurance to Black Americans who were frequently denied coverage by established insurance companies.
That part of his story demonstrates the larger scope of his work. Miles was not only interested in solving mechanical problems. He also attempted to create economic security and opportunity for members of his community.
A lasting contribution to elevator safety
Modern elevators use far more sophisticated electrical controls, sensors and computerized safety systems than those available during Miles’s lifetime. His exact mechanism is not the system operating inside every elevator today.
However, the safety principle behind his work remains essential: an elevator should coordinate the movement of the car with the opening and closing of its doors, while preventing passengers from entering an unprotected shaft.
In recognition of his contribution, Alexander Miles was inducted into the National Inventors Hall of Fame in 2007.
Remembering Alexander Miles accurately
Alexander Miles did not invent the elevator, and he was not the first person to patent an automatic elevator-door system. He was a creative Black inventor who recognized a serious safety hazard and developed a patented method for addressing it.
Everyday technologies are rarely the work of only one person. They develop through generations of experimentation, refinement and improvement. Miles deserves recognition as one of the innovators who helped move elevator technology toward the safer automatic operation passengers now expect.
His work is another reminder that Black inventors helped build and improve many of the technologies that shaped modern American life.
Forgotten Genius Friday celebrates the Black inventors, scientists and innovators whose ideas helped shape the world—even when their names were left out of the history books.
Sources
- Alexander Miles — U.S. Patent No. 371,207
- Alexander Miles — National Inventors Hall of Fame
- Alexander Miles Patent — IEEE REACH
- Alexander Miles — Lemelson-MIT Program
- Alexander Miles — Duluth Public Library’s Vintage Duluth
Historical context
The Knowledge
When Did Water Vending Machines Become a Thing?
When did water vending machines appear in America? Explore their history from a 1908 penny water vendor to the refill machines of the 1970s and 1980s.
You’ve probably seen them hundreds of times.
They sit outside supermarkets, convenience stores and shopping centers—or sometimes stand alone in small roadside kiosks. You bring an empty bottle, usually one, three or five gallons, put in some money, push a button and watch purified water pour into your container.
For many people in California, Arizona and other parts of the American West, water vending machines seem like they’ve simply always been there.
But when did we actually start buying water this way?
The answer takes us back more than a century, although the machines we recognize today didn’t really arrive until the 1970s.
The Water Vending Machine’s Surprising Ancestor
The story begins in Boston in 1908 with a man named Lawrence Luellen.
Luellen was working on something that sounds surprisingly modern: a machine that would allow someone to pay a penny and receive a clean drink of water in an individual disposable cup.
At the time, public drinking water was often consumed from a communal cup or metal dipper—a practice that increasingly worried public-health officials because of the potential spread of disease.
Luellen developed a paper drinking cup along with what became known as the Luellen Cup & Water Vendor. The porcelain machine contained water, ice, disposable cups and a place for discarded cups.
For one penny, a customer could get a drink of cold water in a fresh cup.
Historical records at Lafayette College’s Hugh Moore Dixie Cup Company Collection show that Luellen completed work on the vending apparatus in early 1908. His company, the American Water Supply Company of New England, was incorporated on April 4 of that year.
There was just one problem.
The complete water machine was expensive to manufacture.
The company eventually concentrated on selling the disposable cups and cup dispensers instead. Those cups ultimately evolved into one of America’s most recognizable household products—the Dixie Cup.
So although Luellen’s machine wasn’t the five-gallon refill station we know today, the basic idea was already there:
Put money into a machine and receive drinking water.
The Modern Water Vending Machine Arrives
The next major chapter didn’t occur until roughly 65 years later.
According to histories of the water-vending industry, the first practical machines designed to sell purified water in bulk appeared during the mid-1970s.
These were fundamentally different from Luellen’s machine.
Instead of giving customers a cup of water, the new machines treated water—typically municipal tap water—and allowed customers to fill their own reusable containers.
And we have unusually strong evidence that these machines were operating by 1976.
On July 26, 1976, the U.S. Environmental Protection Agency issued a memorandum specifically addressing the regulatory status of water vending machines.
The EPA described machines that filtered and disinfected water with ultraviolet light and then dispensed the treated water into a customer’s own container using a coin-operated mechanism.
In other words, by the summer of 1976, the basic water-refill machine many of us recognize today was already operating in the United States.
Why the 1970s?
The timing wasn’t accidental.
Americans had become increasingly concerned about pollution and drinking-water quality during the 1960s and 1970s.
Congress passed the Safe Drinking Water Act in 1974, establishing a federal framework for protecting public drinking-water supplies. National drinking-water regulations followed during the decade.
Meanwhile, technologies such as filtration, activated carbon treatment, ultraviolet disinfection and eventually reverse osmosis made it practical to build relatively compact systems capable of treating municipal water at the point where it was sold.
The result was a new business opportunity:
Instead of transporting thousands of bottles of water to a store, a vending company could connect a machine to the local water supply, purify that water on site and sell it by the gallon.
Customers supplied the bottle.
California Helps Turn It Into a Business
California became one of the industry’s most important early markets.
One company that would eventually become a major player was founded by Robert G. Miller.
In 1983, Miller established Bottle Water Vending Inc., the predecessor of Glacier Water Services.
The company manufactured water vending machines and placed many of them outside supermarkets. Customers brought their own containers, while participating stores often sold reusable plastic jugs nearby.
The machines treated municipal water using combinations of filtration, reverse osmosis, carbon treatment and ultraviolet sterilization.
The idea caught on quickly.
In 1984, the company expanded from California into Arizona.
Nevada followed in 1986.
By 1987, the company reportedly had nearly 900 water vending machines operating.
Texas and Florida followed in 1988.
The familiar supermarket water-refill station was becoming a significant business.
Then Came the Drive-Up Water Kiosk
Another variation appeared at almost exactly the same time.
In 1984, Lani and Don Dolifka developed what became Watermill Express in Colorado.
Their idea was an automated stand-alone purification kiosk capable of taking municipal water, processing it through multiple purification stages and selling the finished drinking water directly to customers.
Instead of walking into a supermarket, customers could pull up to the kiosk with their bottles.
Later Watermill Express systems were designed to accommodate reusable containers ranging from one to five gallons, using treatment processes including sediment filtration, activated carbon, reverse osmosis, ultraviolet disinfection and ozone treatment.
That basic concept remains familiar today.
Why Five-Gallon Bottles?
The five-gallon container was already well established through traditional bottled-water delivery services.
But refill vending changed the economics.
Instead of purchasing another filled bottle—or waiting for a delivery—a customer could keep the same container and refill it repeatedly.
That eliminated much of the packaging and transportation involved with conventional bottled water.
It also made purified drinking water relatively inexpensive.
Bring the jug.
Buy the water.
Take the same jug home.
Bring it back when it’s empty.
More than four decades later, that’s still essentially how the system works.
So Who Invented the Modern Water Vending Machine?
That’s where the story gets complicated.
There doesn’t appear to be a single universally recognized inventor of the modern bulk purified-water vending machine.
Lawrence Luellen developed an important early coin-operated water vending concept in 1908, but his machine dispensed an individual drink and disposable cup—not gallons of purified water into a customer’s reusable bottle.
The modern bulk-water machine emerged much later, apparently during the mid-1970s, as water-treatment technology and consumer concern about drinking-water quality converged.
By 1976, the EPA was already dealing with the regulatory implications of machines that treated municipal water and sold it through coin-operated dispensers into customers’ own containers.
Entrepreneurs and companies then refined and expanded the idea during the 1980s.
From a Penny Cup to Five Gallons at a Time
The evolution is remarkable.
1908: Put in a penny and receive a cup of cold water.
Mid-1970s: Machines begin treating municipal water and selling purified water in bulk.
1976: The EPA documents coin-operated machines dispensing treated water into customers’ containers.
1983: Bottle Water Vending, the predecessor of Glacier Water Services, begins operations in California.
1984: Glacier’s predecessor expands into Arizona, while Watermill Express develops its automated purification kiosk in Colorado.
Late 1980s and beyond: Water refill machines become increasingly familiar outside supermarkets and at stand-alone locations throughout the United States.
Today, paying a few coins—or tapping a card—and filling a five-gallon jug might seem thoroughly ordinary.
But the machine sitting outside your neighborhood supermarket represents more than a century of evolution in how Americans buy something that once seemed almost unimaginable to sell from a vending machine:
a drink of water.
Sources and Further Reading
U.S. EPA — Status of Water Vending Machines Under Public Law 93-523
Lafayette College — Hugh Moore Dixie Cup Company Collection
U.S. EPA — Safe Water Research Milestones
Glacier Water Services Company History
World Vision — History of Watermill Express
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High Speed Rail
Brightline West Construction Advances, But Opening Timeline Shifts Beyond the 2028 Olympics
Construction continues to expand along Interstate 15 as Brightline West moves closer to connecting Southern California and Las Vegas with 200 mph electric trains, though the opening timeline has shifted to late 2029.
The vision of traveling between Southern California and Las Vegas in about two hours by high-speed rail is steadily becoming more tangible as Brightline West expands construction activity along the Interstate 15 corridor.
Since construction officially began in 2025, work has continued to ramp up in both California and Nevada. Motorists traveling I-15 may have noticed increased construction activity, survey crews, utility work, and periodic lane closures as the project moves from planning into full-scale development.
Construction Is Becoming More Visible
Brightline West’s 218-mile all-electric high-speed rail line will connect Rancho Cucamonga, California, with Las Vegas, Nevada, using the median of Interstate 15 for much of the route.
Current work includes:
- Utility relocation
- Geotechnical investigations
- Site preparation
- Early civil construction
- Continued work around future station locations
As construction progresses, travelers should expect additional traffic impacts along portions of I-15 while crews prepare for bridges, guideways, track installation, and station construction.
A New Timeline
One of the biggest developments since construction began is a revised completion schedule.
While Brightline West was once expected to open before the 2028 Los Angeles Olympic Games, current projections now place passenger service in late 2029.
Large infrastructure projects frequently experience schedule adjustments due to inflation, labor availability, permitting, and supply chain challenges. Although the delay means Olympic visitors are unlikely to ride the line, construction continues to move forward.
Four Passenger Stations Planned
The line will include stations at:
- Las Vegas
- Apple Valley
- Hesperia
- Rancho Cucamonga
Passengers traveling from Los Angeles will transfer to Brightline West using Metrolink at Rancho Cucamonga, creating an important connection between Southern California’s commuter rail network and the new high-speed line.
Fast, Electric Travel
When complete, Brightline West trains are expected to operate at speeds approaching 200 mph, reducing travel time between Rancho Cucamonga and Las Vegas to approximately 2 hours and 10 minutes.
The fully electric trains are being manufactured by Siemens and are designed to offer a comfortable alternative to one of America’s busiest highway corridors.
Looking Ahead
The next major milestones will likely include visible bridge construction, elevated guideways, station buildings, track installation, electrical systems, and eventually testing of the first trainsets.
While passengers will have to wait a bit longer than originally hoped, Brightline West remains one of the most ambitious passenger rail projects currently under construction in the United States.
For Southern California, it represents more than a faster trip to Las Vegas—it could signal the beginning of a new era for high-speed passenger rail in the American West.
Have you driven the I-15 corridor recently? Have you seen any Brightline West construction? Share your observations in the comments below, and subscribe to the STM Daily News newsletter for more transportation and infrastructure updates.
Source and Related Links
- Brightline West – Construction:Construction Plan & Current Project Details — breakdown of the Nevada and California construction segments, stations, track/electrification and maintenance facility.
- Brightline West – Construction Advisories:Current Construction Advisories — useful for ongoing field investigations, lane impacts and work-zone updates.
- Brightline West – Project Overview:Official Project Overview — confirms the 218-mile Las Vegas–Rancho Cucamonga route and overall project scope.
- Nevada Department of Transportation:Brightline West High-Speed Rail Project — government source covering the route, stations, $3 billion federal award and construction background.
- Siemens Mobility:American Pioneer 220 Manufacturing Facility — details on the U.S.-built high-speed trainsets and Siemens’ Horseheads, New York manufacturing facility.
- Brightline West – Official Groundbreaking:April 2024 Groundbreaking Announcement — useful background on the project’s infrastructure, bridges, rail, electrification and Buy America commitments.
