AI chip shortage

Silicon Valley is being reshaped by an intense scramble for AI computing capacity, as companies race to secure the chips and data-center resources needed to build and run artificial intelligence systems. The competition is driving up costs, straining supply chains and redrawing priorities among the region's biggest tech firms and startups alike.

Memory industry executives, including Micron's CEO, say RAM supplies will stay tight into 2028. They expect no meaningful easing of the shortage, citing surging demand from data centres and AI infrastructure that is absorbing manufacturing capacity. Buyers face higher prices and limited availability of memory chips for PCs and other products.

Apple has reportedly trimmed orders for iPhone 18 Pro components by 15%, a move attributed to a shortage of memory chips driven by surging demand from the artificial intelligence industry. The reported cut suggests the AI memory crunch is beginning to squeeze smartphone supply chains, raising questions about Apple's next flagship launch plans and component availability.

Morgan Stanley analysts say a mounting electricity shortage around AI data centers is disrupting the chip supply chain, with firms like Nvidia and Broadcom seen as relatively shielded from the fallout. Power availability has become a key constraint on AI infrastructure buildout, and investors are weighing which semiconductor suppliers can weather the squeeze.

Morgan Stanley says a growing power shortage is disrupting the semiconductor supply chain as AI data centre demand surges, but Nvidia and Broadcom are expected to remain insulated from the worst effects. The investment bank's analysis highlights electricity availability as an emerging bottleneck for chipmakers and cloud providers racing to build AI infrastructure.

San Francisco Federal Reserve President Mary Daly warned that the shortage of AI-related semiconductors could keep inflation elevated, as surging demand for chips pushes up technology costs and construres supply across the economy. Her comments add a new angle to the inflation debate, linking the AI investment boom directly to price pressures the Fed is trying to contain.

AMD has said that demand for artificial intelligence chips is exceeding the supply it can produce, according to a report highlighted by Finimize. The statement underscores the persistent gap between AI computing demand and semiconductor manufacturing capacity, a bottleneck affecting chipmakers and their customers across the technology industry.

Tesla CEO Elon Musk has scaled back memory orders for AI chips as a global shortage squeezes the semiconductor market. The move suggests Tesla is adjusting its AI hardware plans while chipmakers struggle to meet surging demand for advanced memory. Analysts are watching how the cutback affects the broader memory supply chain and Tesla's AI ambitions.