"Global Semiconductor Shortage May Occur Due to Surging AI Demand"

Bain & Company Report

There is a forecast that a global semiconductor shortage could occur due to the surge in demand for artificial intelligence (AI).

Global consulting firm Bain & Company (Bain) predicted in its annual global technology report published on the 25th (local time) that "a surge in demand for AI chips and smartphones and laptops supporting AI could lead to a global chip shortage."

Currently, the AI chip market required for training large AI models is dominated by Nvidia, holding over 80%. U.S. semiconductor companies like Qualcomm are designing on-device chips that can run AI apps directly on smartphones and PCs, rather than relying on the cloud.

Bain's Chief Technology Officer Ann Hawker said, "The surge in demand for graphics processing units (GPUs) has caused supply shortages in specific elements of the semiconductor supply chain," adding, "If the wave of AI devices accelerating GPU demand and PC replacement cycles meets, there could be greater constraints on chip supply."

The report pointed out, "The semiconductor supply chain is very complex, and if AI demand increases by more than 20%, it is highly likely to disrupt the balance and cause a chip shortage," warning that "if AI demand explodes, bottlenecks could occur throughout the supply chain beyond a critical point."

For example, Nvidia designs GPUs, Taiwan's TSMC manufactures them, and TSMC depends on the Netherlands' ASML for chip manufacturing tools, so although the supply chain is distributed, a surge in demand could cause problems at any one point.

The report also noted that chip supply is exposed to serious risks due to geopolitical tensions, trade restrictions, and technology companies decoupling supply chains from China. It emphasized, "Delays in factory construction, material shortages, and other unpredictable factors can also disrupt supply."

Bain projected that the AI-related market will grow rapidly by 40-55% annually, reaching nearly $1 trillion (about 1,330 trillion won) by 2027. According to Bain, companies have moved beyond the experimental stage and started using generative AI across operations, and governments in Canada, France, India, Japan, and the United Arab Emirates (UAE) are providing billions of dollars in subsidies to their domestic AI sectors.