AI data centre boom drives interest in mass timber as US steel lead times rise

The rapid expansion of artificial intelligence infrastructure is creating new pressure across the US construction supply chain. Structural steel is among the materials facing heightened demand.

Skanska has reported structural steel lead times of 40 to 50 weeks in some US markets. The company says data centre clients are increasingly exploring whether timber could provide another construction option.

The development reflects a wider shift in how builders are assessing structural materials for large-scale digital infrastructure.

Steel Capacity Under Pressure

Demand for data centres has increased as technology companies expand infrastructure to support artificial intelligence applications.

Tom Park, Skanska’s vice president of strategic supply chain, described the market pressure as “Very strong demand for steel and other metals because of the AI rollout”.

Skanska had already identified extended steel lead times in its summer market trends report, released on September 1.

The report highlighted particularly strong demand for structural steel from data centres and large-scale manufacturing projects.

The pressure is also being reflected in material prices.

According to Skanska’s spring report, cold-rolled coil prices had increased 25.3 per cent over 12 months. Aluminium increased 45.3 per cent, while copper rose 29.5 per cent during the same period.

Skanska attributed those movements to electrification, AI-related demand and the closure of the Strait of Hormuz.

Timber Enters the Conversation

Dean Lewis, Skanska’s director of mass timber and prefabrication, said data centre clients had demonstrated “a lot of interest” in timber during a public webinar earlier this month.

“Clients are interested in alternative materials given the supply chain strain in general across all materials,” Lewis said.

However, timber does not automatically provide a lower structural cost.

Lewis said the timber frame itself generally costs more than steel.

A three-storey office examined by Skanska nevertheless came close to cost-neutral when the wider project economics were considered.

The comparison included a smaller foundation and lateral system, along with savings involving finishes, the facade and construction schedule.

That distinction is important for data centre developers.

Material price alone does not determine the overall cost of a building.

Design and Coordination Become Critical

Lead time for a timber project may also be concentrated in a different part of the construction process.

According to Lewis, the critical timing for mass timber generally sits in design and coordination rather than at the factory.

Those stages determine how quickly panels can be prepared and delivered to a project site.

Insurance remains another consideration.

Builders’ risk insurance currently costs more for mass timber than for steel, Lewis said. Skanska is studying potential ways to reduce those premiums with the US Department of Agriculture.

The industry is therefore assessing more than material availability.

Schedule, insurance, design coordination and total project cost all influence structural decisions.

North American Timber Capacity

François Robichaud, partner for market intelligence on wood products and construction at Forest Economic Advisors, said mass timber has recently shown greater price stability than steel.

“has proven to be much more stable as of late,” Robichaud said.

He also noted that North American plants are producing less cross-laminated timber and glulam than their potential capacity.

That could provide room for future demand.

However, lumber pricing remains exposed to trade developments.

Skanska said its summer update expected the cross-border tariff dispute with Canada to influence lumber costs, although trade flows remained steady at that point.

European Data Centre Experience

Mass timber data centre construction already has an operating example in Sweden.

EcoDataCenter opened its first cross-laminated timber data centre in Falun in 2019. Timber supplier Stora Enso described the campus as the world’s first mass-timber data centre in November last year.

John Wernvik, EcoDataCenter’s chief external relations and sustainability officer, said almost 95 per cent of the structural frame is now cross-laminated timber.

Customer acceptance was initially difficult, according to Wernvik.

However, “acceptance has shifted dramatically” since Microsoft and Meta began announcing timber data centres of their own.

The experience demonstrates that technical adoption can change as major technology companies introduce similar approaches.

US Data Centre Construction Continues to Expand

Skanska identifies data centres as the fastest-growing segment of commercial construction in the United States.

The segment represented 5.4 per cent of private non-residential building spending in 2025. That compares with 1.7 per cent in 2019.

Skanska is also directly involved in the market.

During the second quarter, the company booked a $94 million contract for a single-storey, 38.4-megawatt data centre in Virginia. Construction is scheduled to begin in October.

The scale of investment is creating opportunities for alternative structural systems.

Hybrid Approaches Are Emerging

Speed remains a major consideration.

Weyerhaeuser president and chief executive Devin Stockfish said in July that developers had identified construction speed, rather than cost or carbon, as an objection to using wood for data centres.

The company has been promoting the potential role of timber alongside the US Lumber Coalition. WoodWorks was also briefing designers on mass timber applications for data centre design as recently as June.

In August, Vittorio Salvadori, director of design at TimberBLDR, presented a hybrid concept combining cross-laminated timber decks with light-gauge steel-framed data centres.

Salvadori said structural steel typically required 18 weeks for fabrication and delivery. Some sections, however, had reportedly been quoted at up to 48 weeks at the DICE South conference in Arlington, Texas.

He also said big technology companies now purchase up to 10 per cent of all mass timber sold in the United States.

Supply Constraints Could Shape Future Design

Skanska has advised project teams to assess structural options earlier in the design process.

“Evaluating structural options earlier in the design process can help project teams navigate supply constraints,” the company’s summer update advises.

The recommendation is particularly relevant to data centre and advanced manufacturing projects, where construction demand is concentrated.

Skanska expects annual US spending on data centre construction to exceed $100 billion by 2030.

That would represent more than twice the current level.

For the construction and wood products industries, the expanding AI infrastructure market is therefore creating a new structural conversation.

Steel remains central to large-scale construction. Yet extended lead times are encouraging developers and builders to examine mass timber, hybrid systems and other alternatives earlier in the design process.

Read more news on Mass Timber Construction

For more updates, visit the European woodworking industry website: woodandpanel.com