Choi Tae-won, chairman of the Korea Chamber of Commerce and Industry, warned that the global semiconductor supply shortage driven by the rise of artificial intelligence (AI) is expected to worsen next year. He noted that while supply is unlikely to increase significantly, demand for semiconductors across all industries is projected to surge by 100% due to AI.
During a recent press conference at the Jeju Forum, Choi described the situation of skyrocketing global semiconductor demand as 'chaotic.' He stated, "Even if we limit it to AI, there are predictions that demand will increase by at least 60-100% next year compared to this year. Given that there will be almost no increase in supply, overall semiconductor demand is expected to rise by at least 50-60%."
Choi emphasized that the widening gap between supply and demand poses a significant problem that could escalate. He explained, "As companies struggle to secure memory semiconductors, this supply shortage will become a national security issue for governments around the world." He added, "Currently, it is a corporate issue, but in the future, governments will also face pressure from other nations regarding this matter." He stressed the urgency of rapidly increasing production capacity, stating, "We need to scale up production wherever possible to survive in this situation."
Choi also mentioned the need for expansion not only in Korea but also in the United States, saying, "We must explore the globe to identify the best, fastest, and largest locations for expansion. Prioritizing and quickly building these facilities has become a lifeline for the Korean semiconductor industry."
Addressing concerns about a potential early end to the semiconductor supercycle due to increased production, he remarked, "Current prices are abnormal and need to decrease. If prices continue to rise, we will face severe consequences from what is being termed 'chipflation.'" He added, "Increasing supply to lower prices does not mean we won't make money. The Korean semiconductor industry can only sustain and grow if we protect and nurture the market."
Choi identified power, cables, underwater cables, and construction as the next bottlenecks in the AI era. He noted, "As AI becomes more prevalent, we will face shortages in cables and cable materials. Prices are already fluctuating, and there is a shortage of underwater cables. The construction sector is also challenging, as specifications change every one to two years."
Regarding the ambitious plan to build AI data centers worth 1,000 trillion won, Choi expressed confidence that there would be no issues with securing clients, infrastructure, or financing. He explained, "Building a data center indicates that we already have clients. A project can only commence if there are long-term contracts in place, ranging from a minimum of five years to a maximum of 15 years. The project will proceed when clients are secured, and equipment, land, and power are all matched up."
* This article has been translated by AI.
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