The global semiconductor shortage that plagued industries from 2020 to 2024 is officially over. Chip supply now exceeds demand across automotive, consumer electronics, and industrial sectors.
However, a new and different shortage has emerged: AI chips. Nvidia's most advanced GPUs remain backordered by 6-9 months, and TSMC's advanced packaging capacity is fully booked through 2027.
The divergence highlights the bifurcation of the semiconductor market. Commodity chips (for cars, appliances, basic electronics) are abundant and prices are falling. AI chips (for training and running AI models) are scarce and prices are rising.
TSMC CEO C.C. Wei stated that AI chip demand is 'the strongest and most sustained demand signal we have ever seen in the company's history.'