The ongoing conflict involving Iran is causing significant supply chain disruptions for datacenter constructions, leading to increased material costs. The closure of the Strait of Hormuz, a critical shipping route, has notably impacted the availability and pricing of building materials.

According to BCS Consultancy, datacenter construction projects are experiencing up to a 20% rise in the cost of crucial materials, with some supplies being reduced to a mere fraction of previous quantities. Oskar Lampe, regional director at BCS, highlights that oil-based building materials have become more expensive due to the disruption of global supply flows.

The issue extends beyond just material pricing; producing steel, aluminum, and cement relies heavily on energy, and the blockade has compounded existing pressures on datacenter construction. Even before the current conflict, there were reports of shortages in high-voltage transformers and copper largely affecting project timelines and budgets.

Last month, IDC warned that logistical issues and escalating energy costs stemming from the conflict further threaten IT equipment supplies.

Additionally, the datacenter construction industry faces enduring challenges, such as securing land, obtaining planning permission, and connecting to power grids. Segro, a significant UK developer, echoes these concerns by noting long delays in getting projects connected to electricity networks.

Lampe advises project managers to mitigate these impacts by placing orders for essential long-lead items early, incorporating price escalation clauses in contracts, and diversifying supply chains. Projects that depend on single-source suppliers are at greater risk, and alternatives, even if costlier, may provide more resilience.

Overall, the situation underscores the importance of strategic planning and adaptability in tackling ongoing and future supply chain challenges.