AI boom not shock-proof; chip shortage and weak pass-through weigh: Report - ANI News

While the AI boom is supported by strong cash flows, it is not immune to shocks. According to Nuvama Institutional Equities, chip shortages pose a major risk to the rally, especially as hardware price... Read original →

The AI boom is colliding with semiconductor physics and capital discipline. The 3nm node’s reliance on EUV lithography has bottlenecked supply through TSMC and Taiwan, China, inflating hardware costs by 2.5x and crippling hyperscalers’ CAPEX efficiency. With limited AI monetization, soaring valuations now mirror the dot-com bubble, vulnerable to Fed-driven liquidity tightening. Over the next 12 months, NVIDIA may lock in cloud partners via custom ASICs, while Intel leverages U.S. CHIPS Act subsidies to accelerate 20A node ramp—reshaping competitive dynamics. Mass AI adoption won’t ignite during today’s capex mania but post-2026, when hardware costs collapse, echoing how broadband economics catalyzed Web 2.0 in 2005.