AI Demand: Fear of a new semiconductor crisis

Technology: According to a recent analysis by Bain & Company, the global chip shortage may be caused by the growing demand for semiconductors for artificial intelligence and AI-powered consumer electronics applications such as smartphones and laptops. This expected crisis is due to new technological developments that make it different from previous shortages.

The last significant shortage of semiconductors occurred during the COVID-19 pandemic, mainly due to supply chain disruptions and increased use of consumer electronics as people shifted to remote work. Major tech companies are aggressively buying graphics processing units (GPUs), mostly from Nvidia, which are critical for training large-scale artificial intelligence models used in popular applications such as ChatGPT. In addition, companies such as Qualcomm are developing chips that allow individual devices to run artificial intelligence applications locally, improving the user experience without relying on cloud solutions.

A report by Bain suggests that the growing demand for GPUs and AI-enabled devices could lead to widespread supply shortages. The complex semiconductor supply chain is fragile, and even a 20% increase in demand can significantly upset the delicate balance of availability and cause chip shortages.

Additionally, geopolitical tensions and trade restrictions have further complicated the situation in the semiconductor industry. The US government has sought to limit China’s access to advanced chips while increasing domestic production capacity. The ongoing geopolitical dynamics with unpredictable factors could further exacerbate this problem.