The working capital squeeze behind the semiconductor surge - CFO.com

In 2025, U.S. semiconductor and equipment companies saw a 32% revenue surge driven by artificial intelligence (AI) demand, marking the highest growth among all industries surveyed by The Hackett Group... Read original →

The surge in AI demand has driven a 32% revenue increase among U.S. semiconductor and equipment firms in 2025, yet cash conversion cycles have widened, signaling liquidity strain. Technologically, the AI chip supply chain—led by NVIDIA, TSMC, and others—faces bottlenecks in 3nm and EUV production, leading to prolonged inventory and slower receivables. Geopolitical dynamics, particularly U.S.-China trade tensions, have forced companies to build buffer stock, worsening working capital pressure. Competitors like AMD and Intel are ramping up production to gain market share, while suppliers such as Applied Materials and Micron grapple with volatile orders and extended capital recovery periods. Over the next 12–24 months, if AI growth moderates, the industry may enter a phase of deleveraging, with firms prioritizing financial efficiency and regional supply chain resilience.