Recently, a report from Bain & Company has warned that the global surge in demand for AI semiconductors and AI-enabled smartphones and laptops could lead to another chip shortage. It's worth noting that the last major semiconductor shortage occurred during the pandemic when supply chains were disrupted and the demand for electronic products skyrocketed due to widespread remote work.
Currently, tech giants are fiercely competing to acquire graphics processing units (GPUs), particularly those from NVIDIA. These GPUs are the secret weapon for training large AI models, such as OpenAI's ChatGPT, which relies on them to function. Meanwhile, companies like Qualcomm are designing new chips aimed at enabling smartphones and personal computers to run AI applications locally, rather than relying on the cloud. These devices, known as AI-enabled devices, have been introduced by companies ranging from Samsung to Microsoft.
Bain & Company highlights that the surge in demand for GPUs and AI consumer electronics could lead to a chip shortage. In an email, Bain stated: "The surge in demand for graphics processing units has already caused shortages in certain segments of the semiconductor supply chain. If the growth in GPU demand is combined with a wave of AI-enabled devices, this could accelerate the product refresh cycle for personal computers, leading to broader constraints on semiconductor supply."
However, it remains unclear how much demand there actually is from consumers for these AI-enabled devices, as current consumer reactions seem to be cautious. Bain points out that the semiconductor supply chain is highly complex, and a demand increase of 20% or more could easily disrupt the balance, leading to a chip shortage. The report mentions: "At the intersection of large end markets, the explosive growth of AI could easily surpass this threshold, creating vulnerable bottlenecks in the supply chain."
Bain also notes: "Geopolitical tensions, trade restrictions, and the decoupling of multinational tech companies from China continue to pose significant risks to semiconductor supply. Delays in factory construction, material shortages, and other unforeseen factors could also contribute to supply chain tensions."