The rapid surge in artificial intelligence (AI) demand may soon trigger another global chip shortage, according to a recent report by Boston-based consultancy Bain & Company. As AI-focused semiconductors become increasingly essential, the market for AI-related hardware and software is projected to grow between 40% and 55% annually, reaching up to $990 billion by 2027.
David Crawford, chairman of Bain's global technology practice, highlighted in the press release that companies are moving beyond the experimentation phase and scaling generative AI across their operations. This shift is driving an unprecedented demand for graphics processing units (GPUs), which are crucial for training large AI models and powering AI-enabled devices like smartphones and laptops.
The report warns that the AI-driven increase in GPU demand alone could boost total demand for certain upstream components by over 30% by 2026. When combined with existing geopolitical tensions, these factors could disrupt the semiconductor supply chain, reminiscent of the global chip shortage experienced during the COVID-19 pandemic. Back then, supply chain disruptions and a spike in consumer electronics demand severely impacted industries, especially automotive.
Bain's analysis emphasizes the complexity of the semiconductor supply chain, noting that even a 20% surge in demand can upset the balance and lead to shortages. The anticipated explosion of AI across various large-scale markets is likely to create vulnerable points throughout the supply chain.
To mitigate this risk, Bain advises both chip suppliers and buyers to act swiftly. Balancing semiconductor supply and demand is challenging due to the industry's rapid technological advancements, substantial capital investments, and long lead times required to expand production capacity.
As AI continues to integrate into diverse sectors, the potential for a new chip shortage underscores the need for strategic planning and investment in semiconductor manufacturing to support sustainable growth and innovation.
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AI demand may trigger new global chip shortage, Bain report warns
cgtn.com
