#Copper Is Quietly Powering the Next Tech Boom
Many investors are watching AI and semiconductors. But few are paying attention to what’s quietly fueling the whole machine: copper.
Massive government spending, including the CHIPS Act in the US and similar programs in Europe and Asia, is flowing into chip manufacturing. That is positive for silicon-focused companies, but copper plays an essential supporting role. It is used in high-density wiring inside advanced chipmaking facilities, helps manage heat in packaging, and enables high-speed electrical connections.
Here’s what many investors are missing:
As countries race to secure their own chip supply chains, copper demand is set to surge. This isn’t just a tech story, it’s a collision of trends:
Energy transition needs more copper
AI and digital infrastructure rely on it
Global geopolitics are rewriting supply routes
The result? A potential copper supercycle that could reshape the market for years. And most retail investors are not positioned for it.
This could be your early entry point into one of the most overlooked trends of the next decade. Let’s explore why copper’s role in the global economy is only getting stronger.
#Why This Is Important for Retail Investors
Industrial Policy Drives Demand: Chip fabs are highly copper-intensive, and public subsidies are scaling up at unprecedented levels.
Electrification Compounds the Trend: Copper’s role in EVs and grid infrastructure aligns with chip industry expansion, reinforcing demand.
Supply Constraints Persist: Despite high demand, copper supply is struggling due to declining ore grades and long project timelines.
Inflation Hedge Potential: Commodities like copper often perform well in inflationary environments tied to infrastructure spending.
New Avenues for Exposure: From miners to copper ETFs and infrastructure suppliers, investors have diversified ways to benefit.
#About the Sector
Copper is a foundational industrial metal. It’s widely used in electrical wiring, motors, telecommunications, and now, semiconductors. The sector is cyclical, with demand closely tied to global GDP, but structural changes, like decarbonization and digitalization, are introducing new demand drivers. The copper supply chain spans mining, smelting, refining, and manufacturing, and is concentrated in a few key countries, notably Chile, Peru, and China.
#Competitive Landscape
In North America, key players in the copper space include Freeport-McMoRan Inc (NYSE:FCX), Southern Copper Corp (NYSE:SCCO), and Teck Resources Ltd Class B (NYSE:TECK). Freeport operates some of the largest open-pit copper mines and is a bellwether for the sector. On the semiconductor side, companies like Intel Corporation (NASDAQ:INTC), Taiwan Semiconductor Mfg. Co. Ltd (NYSE:TSM), and GlobalFoundries are expanding or building new facilities in the US and Canada, often with government backing. These chipmakers rely heavily on advanced materials and high-specification copper components.
Equipment suppliers like Applied Materials, Inc (NASDAQ:AMAT) and Lam Research Corporation (NASDAQ:LRCX) also stand to benefit indirectly, as their systems enable the use of copper in chip manufacturing. The convergence of these two industries is creating a hybrid ecosystem of traditional miners, advanced manufacturers, and infrastructure players.
#Near‑Term Catalysts and Risks
Major chip fab construction projects are underway in Arizona, Ohio, New York, and across Europe and Asia. These projects are expected to sharply increase copper consumption starting in 2025 and continue to accelerate through 2030.
On the risk side, geopolitical tensions, especially involving China, could disrupt copper supply chains or semiconductor equipment exports. Additionally, copper price volatility and cost overruns on chip fab construction could impact project economics and delay timelines.
#Dive into the Details
If you're watching the semiconductor space, it's time to zoom out and follow the copper trail. Advanced chips need more copper than ever, used in everything from power delivery networks inside chips to high-density substrates in chip packaging. New fabs are essentially copper-intensive buildings, from wiring to process equipment.
Analysts at Sprott Asset Management1 suggest that rising demand from the semiconductor industry and clean energy initiatives may signal the onset of a copper supercycle in 2025. So, how do you trade it? Look at large-cap miners like Freeport or diversified ETFs with copper exposure. You might also track construction progress of new fabs, as these timelines often signal when copper procurement ramps up. Infrastructure suppliers with copper-heavy product lines could also see earnings tailwinds.
Ask yourself: Are we heading into a decade-long infrastructure buildout? If so, copper isn’t just a raw material. It's a strategic asset.
#FAQs
What is a copper supercycle?
It’s a long-term surge in demand and prices driven by structural shifts like electrification, industrial policy, and digital infrastructure buildouts.
Why do chips need copper?
Semiconductor fabs and chip packaging rely heavily on copper for wiring, interconnects, substrates, and thermal management. As fab complexity grows, so does copper usage.
How is the CHIPS Act impacting copper demand?
CHIPS Act funding fuels US fab construction, which increases copper demand across buildings, process equipment, and chip packaging.
Is copper demand growth a global trend?
Yes. China, Europe, and Southeast Asia are expanding chip capacity too, amplifying copper demand worldwide.
Are copper supply constraints real?
Yes. Ore grades are falling, permitting is slow, and inventories are tight. As of June 2025, LME stockpiles have dropped nearly 75% in 2025, pointing to a real and growing shortfall.
Is oversupply a risk?
No. A recent IEA report projects a significant copper supply shortfall by 2035. Based on the current pipeline of existing and announced mining projects, the deficit is expected to reach 30% under the Stated Policies Scenario (STEPS), 35% under the Announced Pledges Scenario (APS), and more than 40% under the Net Zero Emissions Scenario (NZE), underscoring the growing mismatch between supply and demand driven by the global energy transition.
What drives copper prices today?
Semiconductor and clean energy demand, grid expansion, and supply bottlenecks. Prices hit $9,675 per ton in June 2025 as global inventories dwindled.
Is copper still tied to China’s economy?
Yes, but less so than before. China remains a major driver, but demand is now diversified across EVs, renewables, and semiconductors in the US and EU.
How volatile are copper prices?
Copper has a history of sharp swings, but tight supply and new strategic demand could moderate downside risk over time.
What are the main risks to copper’s bull case?
Delays in fab construction, weaker global growth, or advances in alternative materials, though copper’s unique properties limit substitution.
Is copper a good inflation hedge?
Historically yes. It tends to outperform during infrastructure booms and reflationary cycles tied to public investment.
What geopolitical risks should I watch?
US-China trade tensions, export restrictions, and political instability in mining regions like Chile or the DRC can disrupt supply and drive volatility.