🧠 Food for thought

Implications, context, and why it matters.

Demand is outpacing supply

• TSMC CEO C.C. Wei said advanced-node output is about three times below what major customers expect to use 1.
• Lead times for the most advanced AI chips have stretched past 50 weeks, up from about 30 weeks six months earlier 2.
• AI accelerators (specialized chips used to train and run AI systems) brought in about 17%–19% of TSMC’s total wafer revenue in 2025 and could grow at a mid-to-high 50% compound annual rate through 2029 3.
• TSMC set a record US$52–56 billion capital budget for 2026 and plans to raise prices for advanced-node manufacturing services 3.

The shortage is reshaping geopolitics and prices

• Limited chipmaking output has turned access to production into a zero-sum contest with geopolitical stakes.
• Making older NVIDIA H200 chips for China can draw on the same scarce inputs as U.S.-bound parts, including advanced logic wafer capacity, High Bandwidth Memory (HBM) and advanced packaging 4.
• Large chip companies that reserve production years ahead can build a durable edge, which leaves smaller rivals shut out of leading processes 2.
• Memory makers shifting output toward AI chips have tightened supply for PCs and smartphones, with some consumer memory prices climbing to about four times their earlier level in late 2025 5.