AI Chip Shortage and Post-Covid Economic Recovery

May 20th, 2021

As global economies start to reopen after covid vaccination, the technology world is currently experiencing a shortage of computer chips, primarily due to delayed production of semiconductors. In addition to consumer electronics, almost every new technology (AI, 5G, cloud computing, etc.) relies on computer chips. That is why people are also referring to this shortage as an AI chip shortage.

AI Researchers and enterprises use GPU chips (made by NVIDIA) for model training and inference. The demand for GUP chips will increase further as we see a trend towards custom AI-based innovation at the silicon or semiconductor level. Two such startups, Graphcore and Habana Labs., recently got acquired by Intel. This trend is also referred to as AI Silicon.

75% of semiconductor manufacturing is in East Asia; TSMC in Taiwan and Samsung in South Korea. Covid pandemic, weather, and fire have mainly disrupted the supply chain of semiconductors. Reportedly, there is a 25% shortage of computer chips. The US govt and Europe have put this issue very high on their priority as this could have a huge impact on post-Covid economy recovery. The experts believe the AI chip shortage may last for 6 months.