AI industry increases demand for Daikin products
Most residents would not think of Decatur as an important part of the artificial intelligence industry, but the Daikin manufacturing plant off of Alabama 20 produces materials crucial to large-scale data operations.
"It's exciting for (Daikin) to be making materials in Decatur that feed these rapidly developing, cutting edge technologies like AI/data center," said Allan Britnell, vice president of manufacturing for Daikin America and plant manager of the Decatur site. "We're starting to see these markets take off, and it is creating a strong demand for some specific grades of our fluoropolymers.
"The demand speaks strongly of our products, our people and our Daikin future here in Decatur."
Britnell said the demand for Daikin's fluoropolymers has increased dramatically since the start of 2025.
President Donald Trump's administration has pushed for the United States to be a global leader in the AI realm. The Department of Energy recently shared its plans to use $57.5 million to advance energy technologies and secure the national grid, which faces unprecedented demand from AI technology and data centers.
For years, Daikin's products have been used in local area network (LAN) cables, which are used in home and office spaces for computer and communication purposes. The cables are coated in fluoropolymers, which are flame and chemical resistant. These fluoropolymers can also transmit electrical current faster than almost any other material.
The rise of data centers marks a shift in demand for these fluoropolymers from LAN cables to technology that can serve these high-speed, large-scale AI operations. In particular, Daikin's fluorinated ethylene propylene copolymer (FEP) and polytetrafluoroethylene (PTFE) are among the fluoropolymers most in demand from the data industry.
In addition to the cables, Daikin produces materials necessary for semiconductor chips — another critical component of data center operations.
"The sector you're looking at right now, those FEP materials are made domestically. They're made right here, and the PTFE materials that are used for semiconductors, those are made in Decatur," said Daikin Global Director of New Business Development Tim Takala.
Takala explained that as traditional printed circuit boards with copper traces experience speed limitations, data centers are using Flyover cables within circuit boards. This technology allows for data speeds of 224 gigabits per second.
For reference, Spectrum offers residential customers 500 megabits per second and 1 gigabit per second internet plans. The technology being used by the data industry allows for speeds 224 to 448 times faster than what Spectrum's typical residential customer might use — and the speeds are only increasing. These high-speed copper cables have length limitations, but Takala said they are 15% faster than fiberoptic cables.
Although he declined to name the specific company, Takala said Daikin's FEP is used in QSFP cables that allow for information to travel at these top speeds.
"I can tell you that the materials we use in the high-speed data centers are in high demand," Takala said.
Data centers also have large cooling needs to ensure the equipment functions properly. At a recent Building Industry Consulting Service International conference that Takala attended, one presenter said that graphics processing units (GPUs), which are essential to AI operations, will break within eight seconds if not cooled properly.
Between the cables, the semiconductor chips and Daikin's air conditioning operations, Daikin could become fully vertically integrated, according to Takala.
With the governmental push for AI development and employment, he believes Daikin will continue to be an important part of the puzzle.
"When you start the CHIPS Act and onshoring of technologies, especially local markets like aerospace, where you have locally made products, they look for U.S. or U.S.-friendly locations of manufacture," Takala said. "The Decatur plant becomes incredibly critical to support those needs because it is homegrown."
While the Decatur site doesn't have any current expansion plans, Britnell wouldn't rule out the possibility in the future.
"We're always looking for opportunities to grow the Decatur facility," Britnell said. "... As these markets develop and the needs for our products grow, we'll first look to maximize our existing plant assets, but the possibility for capital expansion sometime down the road is there. We'll see where the market takes us."
The Decatur plant works to make sure the increased production of fluoropolymers doesn't affect the environment, as it strives to be a good community partner, Britnell said. luoropolymers fall into a class of "forever chemicals" known as PFAS — perfluoroalkyl and polyfluoroalkyl substances — that break down slowly in the environment and have been linked to health issues, according to the Environmental Protection Agency.
Daikin has policies in place regarding safe PFAS production, Britnell said. According to its website, the products it manufactures have been approved by the EPA and the U.S. Food and Drug Administration.
"Daikin is investing more than $300 million to capture PFAS in our water discharges," Daikin's website reads. "We have achieved our internal target of recovering 99% of the polymerization emulsifiers released from the fluoropolymer manufacturing process in the United States and Europe."
The Decatur site is actively installing new equipment that aligns with its sustainable production policies, according to Britnell, and future expansion will follow the same guidelines.
The above insights are based on "AI industry increases demand for Daikin products”, by GraciAnn Goodin, The Decatur Daily, Ala, published on https://finance.yahoo.com/news/ai-industry-increases-demand-daikin-124000060.html