The meteoric growth of AI and other computing-intensive technologies has created a data center construction boom, offering manufacturers opportunities to supply critical infrastructure, such as IT and data management equipment, modular enclosures, cooling systems, and power equipment. While leading OEMs deliver these specialized systems, smaller job shops and contract manufacturers can capture new business by producing the precision components that make them possible. Modern data centers are massive, with 100-megawatt facilities often costing more than $3 billion to build and equip. They rely on thousands of high-precision parts throughout their power, hardware, and cooling infrastructure. Explosive demand has driven historic backlogs across the infrastructure supply chain, opening the door for small contract manufacturers and job shops to break into the data center market by innovating ahead of larger companies and scaling up quickly to meet mission-critical deadlines. The figure shows the server rack, a key infrastructure component of a modern AI-optimized datacenter.Three Infrastructure Growth Areas Every high-performance data center depends on three major infrastructure subsystems: incoming power, heat removal, and network interconnects. Chuck Byers, CTO Emeritus of the Industry IoT Consortium“To optimize efficiency, mechanical and electrical contractors are adopting newer technologies, and this presents opportunities,” says Chuck Byers, chief technology officer of the Industry IoT Consortium. Over his 40-year career, Byers has served as lead architect for more than 20 IoT, robotics, edge computing, networking, and wireless products, and held leadership roles at Cisco Systems and Bell Labs (Alcatel-Lucent). Byers sees three areas of opportunity: Incoming Power: Modern data centers are shifting from traditional 240-volt AC to 800-volt DC power distribution to improve efficiency and power density. Heat Removal: Liquid cooling systems are replacing traditional air cooling, using cold plates to transfer heat from server chips to circulating liquid coolant more efficiently. Interconnecting Servers: Multiple layers of advanced fiber-optic and precision copper cables are replacing older metal cables to meet the enormous bandwidth demands of AI computation. Download NowHow To Compete Small shops generally can’t compete directly with large, well-established incumbents in these spaces. “Imagine trying to sell a chiller against Carrier or a data processing unit against Nvidia,” says Byers. “Instead of competing against established industry leaders, small shops can gain a foothold by producing innovative parts for these newly designed systems, such as precision-machined aluminum cold plates for liquid cooling or machined cases for AI clusters.” One way to enter the market is through design collaboration for manufacturability. For example, OEM engineers often call out extremely tight specifications that add machining complexity but provide limited functional value. Job shops with strong CAD/CAM capabilities can become trusted engineering partners by recommending design modifications that help parts meet performance requirements while reducing costs. Small shops can also leverage their agility. Decentralized decision-making enables smaller shops to pivot quickly during the design, manufacturing, and testing of custom parts in ways that larger operations may not be able to. Job shops are built to create prototypes and execute short production runs. Data center developers requiring rapid turnaround for a mission-critical system will place a high value on a shop that can keep them on deadline. Efficiency Drives Innovation Data centers consume enormous amounts of power, making energy efficiency one of the industry’s highest priorities. New hyperscale data centers are predicted to cost $5 to $8 billion per 100-megawatt facility, making it even more critical to maximize their performance. “Roughly 100,000 distinct high-precision parts exist across a large data center’s server, power, cooling, and interconnect stack. Innovative job shops can stand out by making these critical parts,” says Byers. “For example, the failure of a $2 brass fitting that feeds coolant into a $3 million rack can be catastrophic if it leaks or plugs.” Such high stakes increase demand for tighter tolerances, cleaner manufacturing, higher-quality materials, and more efficient quality control and metrology. “The best position for a small shop is to offer a niche product on a growth trajectory, innovating just ahead of the headlights of the bigger players,” says Byers. The figure shows some of the key infrastructure components of a modern AI-optimized datacenter.A Path to Commercialization One example of a part suitable for production by a small shop is a cold plate: an aluminum block about the size of a deck of cards with fine serpentine channels milled inside, a brazed or laser-welded lid, and two pipe connections. It bolts to the top of a GPU (graphics processing unit), CPU, switch, fiber-optic transceiver, or other high-power semiconductor device, and transfers heat from the component to the circulating liquid coolant. A 1,500-watt GPU, such as an Nvidia Blackwell GPU, generates as much heat as a salon hair dryer, and a refrigerator-sized rack could contain 72 of them today and potentially hundreds within a few years. “The innovation path a shop could follow is to figure out how to make a better cold plate,” says Byers. “If it can transfer heat faster, the silicon stays cooler, which is always good for the performance, efficiency, and reliability of these expensive chips.” Another opportunity is to design a cold plate that maintains the same chip temperature while operating with warmer coolant. That reduces cooling costs throughout the facility. “This cold plate might only be a $100 part, but there’s a lot of science involved in making a better cold plate than anyone else,” says Byers. “Also, this year’s 1,500-watt GPU becomes a 2,000-watt GPU next year, requiring a bigger and more efficient version of the same part.” A job shop could display an optimized cold plate at industry events and promote it in trade media to gain visibility among major players. “A system integrator could find you via a web search, which can lead to prototype orders that show your cold plate works better, leading to its inclusion in the system that’s sold to data centers,” says Byers. The key, says Byers, is to get the attention of major subcomponent manufacturers, system integrators, and their suppliers. Examples include: Cooling systems: Vertiv, Nvidia, Schneider Electric Power systems: Eaton, ABB, Siemens Interconnect systems: Nvidia, Broadcom, Cisco Servers: Dell, Lenovo, Supermicro Hyperscalers: Microsoft, Google, Amazon Neoclouds: CoreWeave, DigitalOcean, Nebius Ready To Scale In the data center market, a 50-piece prototype order this year can become a monthly order for 50,000 pieces next year, which means suppliers need the ability to scale rapidly. This means having high-volume machining, inspection, and unattended operations capabilities in place or prepackaged and ready to drop when a volume program becomes real. Waiting six months or more for an integrated automation cell to be designed and delivered may not be an option. When qualifying suppliers, Byers says that companies look for: Automation or scaling experience Room to expand Suitable incoming power (5 megawatts or more) for equipment and robots Engineers and CAD/CAM experts closely connected to production, not detached from the realities of the shop floor Strong supply chains, including solid raw material suppliers such as aluminum bar and brazing paste; supplier diversity; and buffer inventories of single-source or conflict-mineral inputs such as beryllium for special alloys. If a natural disaster knocks out shipping capabilities, data centers can’t wait a year for another bucket of brazing paste. Data center requirements will continue to evolve. As some communities push back against data centers in their backyards, Byers has developed two designs for data centers in space: a 140,000-watt design and a 5-megawatt design. “As the cost of getting a kilogram into orbit continues to decline, and as the cost of electricity rises, we’ll eventually reach a breakover point where it becomes financially reasonable,” says Byers. Space-qualifying components add layers of complexity, but such components can command high margins. Technology Solutions at IMTS 2026 To compete in demanding data center markets, manufacturers should evaluate technologies at IMTS 2026 – The International Manufacturing Technology Show, which runs from Sept. 14-19, at McCormick Place in Chicago. Register NowStart by looking at the dozens of 5-axis and multitasking CNCs in the Metal Removal sector. By completing complex parts in a single setup, these machines can eliminate secondary operations, offer longer unattended runtime, and improve accuracy and consistency. “When we think of finding solutions at IMTS, we automatically think of a particular machine tool, but what we really need to meet today’s challenges is the mindset of multitasking,” says Tim Thiessen, vice president of sales at Okuma America Corporation (IMTS booth #338500). “The most efficient shops are those with machining centers that bring multiple processes or multiple steps together and make them work as one.” “Growing demand can arrive hand-in-hand with increased product complexity, tighter lead times, and ongoing skilled labor constraints,” adds Michael Huggett, president and CEO, Index (IMTS booth #339119). “Beyond simply securing work, you need to ensure you have the capability, capacity, flexibility, and efficiency to deliver it.” Higher-volume production typically requires some form of automation, including bar feeders, pallet systems, robots, cobots, and automated laser cutting and welding cells. The Automation sector at IMTS 2026 features more than 180 exhibitors. “For example, 71% of high-performing job shops employ some form of unattended operation, significantly increasing machine utilization and revenue,” says Ryan Kelly, vice president of technology at AMT – The Association For Manufacturing Technology, which owns and produces IMTS. “As a result, machine use rises from 8.5 to 15 hours per day, and sales per machine rise from $183,000 to $350,000. However, adoption remains uneven, creating a major opportunity for shops that invest in advanced technologies to gain a competitive edge.” The Quality Assurance sector features 200-plus companies offering systems that enable higher throughput. These systems can accelerate inspection by combining sensing technologies such as CMMs, 3D scanners, and vision systems with software that generates inspection reports more quickly. “Additive manufacturing technologies like 3D printing can have a place in data center components, especially for prototypes,” adds Byers. Of course, industrial AI solutions will play a significant role in meeting data center production demands, and IMTS 2026 will feature more than 40 companies at the debut of its Industrial AI Arena. AI hyperscalers, including Amazon Web Services (IMTS booth #236217), Google Cloud (IMTS booth #236709), and Microsoft (IMTS booth #237660), will display industrial AI solutions for every step of the manufacturing workflow, from estimating and design to production and quality assurance. “IMTS provides manufacturers with an opportunity to separate hype from reality,” says Kelly. “IMTS 2026 gives manufacturers direct access to AI experts who understand industrial processes. These companies know how to apply AI to real manufacturing workflows, identify opportunities for improvement, and offer new ways of working.” IMTS 2026 also features the debut of the IMTS Industrial AI Conference, a full-day educational event on Sept. 16 focused on practical knowledge for the factory floor, as well as an AI-focused session at the IMTS Job Shops Workshop on Sept. 15. Are you ready to capture your share of today’s most dynamic markets? Learn how new manufacturing technologies can elevate your market position. Register for IMTS 2026 and explore exhibitors. Do you have input about this article? Tell us about it. Further Reading:How AI is Enabling the Text-to-Part Manufacturing VisionManeva Unveils AI Platform for Smarter Factory OperationsIMTS Industrial AI Conference Helps Manufacturers Develop AI Game Plan
Data center demand is creating new business opportunities for manufacturers. Learn where those opportunities are and see the technologies that can help you win. Come to IMTS 2026.
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