Demand for gallium, a critical semiconductor metal, hit a record high in late December 2025 as global data center construction accelerates to support AI infrastructure. The surge is directly tied to rising production of high-performance chips, particularly those used in AI accelerators.
- Gallium price reached $1,480/kg in December 2025, a record high
- 32% year-over-year increase in gallium prices driven by AI data center demand
- Nvidia (NVDA) AI chips rely on gallium arsenide and nitride substrates
- Over 120 new AI data centers announced globally in Q4 2025
- Gallium demand growth linked to semiconductor manufacturing scale-up
- LNG and rare earths (REE) also seeing elevated demand due to infrastructure needs
Gallium prices reached a new all-time peak of $1,480 per kilogram in late December 2025, driven by unprecedented demand from semiconductor manufacturers scaling up output for AI-driven data centers. This marks a 32% increase year-over-year and a 68% rise from the same period in 2023, underscoring the metal’s growing strategic importance. The spike coincides with a surge in capital expenditure by tech giants and cloud providers, including Nvidia (NVDA), whose AI chips require gallium arsenide and gallium nitride substrates for high-frequency, energy-efficient performance. The uptick in gallium demand is part of a broader industrial shift as global data center capacity expands at a compound annual growth rate of 18% through 2027. According to industry estimates, over 120 new AI-optimized data centers were announced in the U.S., Europe, and Asia during Q4 2025 alone. These facilities rely heavily on advanced semiconductor components, with gallium-based materials now central to the production of power amplifiers, RF modules, and high-speed transistors. Market participants are now reevaluating supply chains, with manufacturers of gallium (such as GAL) and rare earth elements (REE) seeing increased investor attention. The metal’s price volatility has prompted several mining and refining firms to accelerate expansion plans, particularly in China, Japan, and the U.S., where new processing facilities are under development. Meanwhile, energy-intensive sectors like liquefied natural gas (LNG) are also benefiting, as data centers require reliable, low-carbon power sources—boosting demand for cleaner fuels. The rally in gallium reflects a deeper structural shift in global tech infrastructure, where raw material availability is becoming as critical as chip design. Investors in semiconductor equipment, industrial metals, and data center infrastructure are closely monitoring the trend, as any disruption in gallium supply could delay AI hardware rollouts and impact earnings for major tech firms.