Recently, a new report has indicated that with the rapid advancement of AI technology, the global chip market could face another shortage by 2026. According to a study by Bain & Company, demand for AI-related products and services is expected to grow by 25% to 35% annually. Even a demand growth of just 20% could disrupt the supply-demand balance, leading to another global chip shortage crisis.
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The report mentions that our appetite for AI will drive the construction of data centers. Future large data centers will require over one gigawatt of capacity, while most current data centers have capacities between 50 and 200 megawatts. By 2027, the annual growth rate of the AI software and hardware market is expected to reach 40% to 55%. The current construction cost of data centers ranges from $1 billion to $4 billion, and by 2026, this cost could rise to between $10 billion and $25 billion, with the total value of the AI market projected to be between $780 billion and $990 billion.
To cope with this surge in demand, the supply chain for chip production must also be able to expand rapidly. However, the reality is that the supply chain is as complex as a spider's web, with chip raw materials at its core. To meet the demand for the latest chips, the most advanced manufacturing plants need to increase their capacity by 25% to 35% between 2023 and 2026. Additionally, companies that manufacture these advanced chips, such as TSMC and Samsung, will also need to add more production facilities.
At the same time, governments around the world are actively investing in building their domestic semiconductor production capabilities to reduce dependence on other countries. For example, the United States is promoting the development of the semiconductor industry through the CHIPS Act, while Europe aims to produce 20% of the world's semiconductors by 2030. While these measures help enhance production capacity, they could also cause supply-demand mismatches in the short term.
Due to geopolitical tensions and trade restrictions, the risks in the chip supply chain are increasing. The United States has imposed restrictions on chip exports to China, and China has also implemented export controls on some rare metals. This situation will pose more challenges to the production and distribution of chips in the future.
For businesses, how to survive the upcoming chip shortage is a critical issue. Companies can enhance their resilience by gaining a deep understanding of the entire AI supply chain, signing long-term procurement agreements, and diversifying suppliers. In summary, with the proliferation of AI, both businesses and nations need to take proactive measures to cope with the potential supply crisis.
Key points:
🌐 The global AI market is projected to reach between $780 billion and $990 billion by 2027, with a surge in demand.
🏭 To meet the demand, manufacturing plants need to increase capacity, with the most advanced chip production requiring billions in investment.
⚠️ Geopolitical and trade restrictions could lead to greater risks in the chip supply chain.