Surging AI demand could cause the world’s next chip shortage, research says

Indeed, the research suggests that the accelerating demand for Artificial Intelligence (AI) applications could trigger a new global chip shortage. AI and Machine Learning (ML) technologies require a significant amount of processing power, which is provided by advanced semiconductors or microchips.

In the last few years, AI has rapidly become a part of everyday life with various applications from virtual assistants to autonomous vehicles and facial recognition systems. As a result, there will be increasing demands on chip manufacturers to produce more high-end chips. If the chip supply cannot keep up with this growth, it could lead to a chip shortage.

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Apart from the AI demand, factors like geopolitical tensions, production constraints, and the COVID-19 pandemic have also contributed to the disruption of the global semiconductor supply chain, leading to the recent chip shortage seen in the auto and tech industries.

Thus, to prevent another chip shortage due to surging AI demand, it would be necessary for proactive capacity planning, increased funding in chip manufacturing, and diversification of the chip supply chain.

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