Empowering AI Stability at Scale: Energy Storage Systems for Data Centers

The increased introduction of high-performance AI servers around the world has made securing stable power supplies for data centers a major issue. To address this problem, Panasonic Energy Co., Ltd. (Panasonic Energy) is developing its business in energy storage systems that can help ensure stable operations for data centers, and strengthening its production and supply framework inside and outside Japan with an eye on future growth in demand. Applying its forward-looking proposal and development capabilities to evolve these systems, Panasonic Energy aims to achieve sales of around ¥800 billion in this segment in FY2029.^*1

*1. In this article, “FY2029” refers to the fiscal year ending March 31, 2029.

Generative AI is developing rapidly. According to surveys, the global server market for AI applications (AI servers) is predicted to grow from US$52 billion in 2023 to US$224 billion in 2028, an impressively high compound annual growth rate of 34%.^*2

*2. Panasonic Energy calculations based on a survey by Gartner.

AI servers consume large amounts of electricity in a short period to support processing by multiple GPUs (graphics processing units: the semiconductors that handle AI’s many calculations). As a result, peak power levels for such servers can rise rapidly and voltages can often become unstable. This means that securing stable, highly reliable power supplies is an absolute necessity for AI data centers.

With this background, in recent years attention has been focusing on distributed power supplies. By placing a battery backup unit (BBU) on each server rack, these can cover power shortages during peaks, helping to stabilize voltages. Their use is being primarily driven by large-scale cloud service providers known as “hyperscalers,” who operate cloud services and data centers on an enormous scale.

Panasonic Energy’s high-output, space-saving, rack-mounted data center energy storage system consists of multiple storage modules incorporating lithium-ion battery cells, along with a shelf that houses these modules. In addition to a backup function for blackouts, they are equipped with a peak shaving function^*3 that enables them to cover shortages during peak demand, supporting energy-efficient and stable operations at data centers.

*3. Peak shaving function: A mechanism that stores electricity during off-peak hours and uses it during peak demand periods to enhance data center energy efficiency.

Panasonic Energy already holds an 80% market share^*4 for distributed power supply systems for data centers. In FY2029, the company aims to achieve sales worth ¥800 billion through a combination of growing demand for existing products and market launches for next-generation products. The company has already reached agreements with customers on projects representing more than 80% of its planned sales, allowing it to proceed with product development and secure orders for these projects. This is evidence of a long-term commitment with hyperscalers to work toward platform designs focused on the next and future generations of the technology, and includes development phases.

*4. According to Panasonic Energy research based on a Synergy Research survey (correct as of December 2025).

With the global spread of generative AI, and accelerated investment in its infrastructure, demand for Panasonic Energy’s data center energy storage systems is booming and the number of inquiries continues to grow.

By pivoting its existing production facility assets, Panasonic Energy is currently developing a supply framework that will allow it to respond to growing demand over the long term.

In terms of lithium-ion cells, Panasonic Energy aims to increase its production capacity in Japan in FY2029 to around three times that in FY2026. The company will expand its existing sites’ lines and adapt automotive lines, with plans to start production on these during FY2027. Additionally, it is looking into using some lines of its Kansas Factory, one of its automotive lithium-ion cell production facilities in North America.

For energy storage modules, in addition to strengthening production capacity in Japan, Panasonic Energy is also enhancing its existing lines at its plant in Mexico, and plans to establish a new plant nearby.

The reason customers choose Panasonic Energy’s data center energy storage systems comes down to its end-to-end solutions capabilities, something a dedicated battery manufacturer cannot offer. Panasonic Energy, though, participates in everything in-house—from battery cell development to module design, overall system quality control, and even control and maintenance—for faster delivery and greater reliability.

Through its business for data centers, which has been going on for more than ten years, Panasonic Energy has built up relationships with engineering supervisors on the customer side. Through direct dialogue, it has crafted a framework that allows it to anticipate and understand customers’ issues and needs. Panasonic Energy’s ability to swiftly make optimal proposals under this system is another of the company’s strengths.

These initiatives have helped Panasonic Energy gain significant praise for its ability to achieve the desired performance and implement systems, as well as for delivery and quality. As customers update their equipment and transition to new platform generations, they continue to turn to Panasonic Energy.

In addition to these strengths, Panasonic Energy is looking at collaborating with external partners to further enhance its development capabilities. By collaborating with other companies, such as power supply manufacturers, Panasonic Energy will flexibly introduce the equipment and technologies it needs. On the other hand, by possessing its own core technologies such as battery cells, Panasonic Energy will further enhance its differentiated capabilities.

Going forward, as AI server energy consumption increases even further, demand for advanced power supply solutions is predicted to grow. In response, the Panasonic Group will utilize one of its strengths, collaboration across operating companies, and advance development of innovative solutions.

Specifically, Panasonic Energy and Panasonic Industry Co., Ltd. are jointly developing rack shelves equipped with capacitor backup units (CBUs) that incorporate supercapacitors to absorb fluctuations in power load, with production scheduled to begin during FY2027. This is a solution that only Panasonic Group can deliver with its expertise and technologies that extend from capacitors to battery cells.

Panasonic Energy will maintain its impressive market share in the field of data center distributed power supply systems and will work toward further business growth.

AI data centers play an essential role in ensuring modern society continues to function. By providing safe and secure power supply solutions, the Panasonic Group will contribute to society and everyday well-being. At the same time, its efforts to bring energy efficiency improvements and reduced energy consumption to the growing number of data centers will help address society’s demands for decarbonization and support greater environmental sustainability.