Nomura’s Chip Shortage Index: A Signal for AI Era Business Cycle - Nomura Connects

Nomura's newly introduced Chip Shortage Index (CSI) highlights an unprecedented supply-demand imbalance in the semiconductor industry, which is now becoming a key driver of business cycles in the AI e... Read original →

The semiconductor supply-demand imbalance has evolved from an industry cycle into a macroeconomic driver. The AI investment boom has created sustained demand with reduced price sensitivity, exacerbating supply bottlenecks. As Moore’s Law effects wane and advanced fabrication costs rise, capacity expansion lags behind demand, keeping chip prices elevated. Nomura’s CSI index reaching 103.8 signals a prolonged shortage phase, transitioning from 'boom' to 'slowdown'. Technologically, AI-driven demand for high-end chips intensifies shortages, while mid-to-low-end markets face capacity misalignment. Geopolitical risks, especially export controls and regional tensions, heighten supply chain uncertainties, particularly in South Korea and China Taiwan/ Taiwan, China. Companies may shift toward localized production strategies. Over the next 12–24 months, a slowdown in AI investment could trigger capital expenditure adjustments, but sustained high investment will likely fuel a new round of shortage-driven price hikes and capacity expansion, deepening macroeconomic interdependencies.