AI chip demand tightens supply for electronics and automakers
Capacity is shifting towards higher-margin AI semiconductors, increasing component shortages and pricing pressure for electronics, automotive, and industrial manufacturers.
Surging investment in artificial intelligence data centres is redirecting semiconductor capacity towards higher-margin chips, leaving consumer electronics, automotive, and industrial manufacturers facing tighter supplies and higher component costs.
Shrish Pant, Director Analyst at Gartner, said rapid growth in AI data centre capital expenditure over the past two years has sharply increased demand for graphics processing units, servers and memory.
“What we are seeing right now is bottlenecks across the industries are shifting from one semiconductor device to another,” Pant said.
Chipmakers are increasingly directing production capacity towards hyperscalers and AI data centres, where margins are higher. Pant said this is making it harder for other industries to secure the components they require.
Consumer electronics manufacturers are particularly exposed because of the sector’s sensitivity to prices. Pant said PC and smartphone prices have already risen 20% to 30%, whilst manufacturers are also facing shortages of older-generation memory and other components as production shifts towards AI semiconductors.
Automotive and industrial manufacturers face similar pressure. Pant said customers in these sectors typically secure component supplies through agreements lasting four or five years or longer, but current shortages are forcing some to search for available components and pay higher prices.
The semiconductor boom is producing uneven effects across Asian manufacturing markets.
South Korea is benefiting from strong memory demand, whilst Taiwan is gaining from demand for graphics and central processing units and advanced packaging. Pant also pointed to opportunities for Japanese material and semiconductor equipment suppliers as chipmakers expand production.
If shortages persist into 2027, Pant expects consumer electronics to face the greatest risk, followed by automotive and industrial manufacturers.
For non-AI manufacturers, continued capacity prioritisation towards AI chips could therefore prolong supply constraints, raise input costs and make it harder to meet demand.
