The semiconductor industry is showing restraint amid AI boom

Global AI capex spending will come in at 423 billion dollars this year, up from 225 billion dollars in 2024, rising further to 572 billion in 2026, according to UBS figures. By 2030, the bank expects overall spending to hit 1.3 trillion dollars, implying a 25 percent compound annual growth rate (CAGR) over the next five years. AI-related compute demand “is outpacing expectations,” UBS wrote in a note.

The semiconductor industry is feeling the upstream pull for more AI silicon, but it isn’t giving in to exuberance. CEO Jensen Huang of Nvidia, toting an order book of 500 billion dollars, recently attended a TSMC sports event to persuade his counterpart at the Taiwanese foundry to supply more wafers. His manufacturing partner is obliging, but not as aggressively as Huang and others would like. Tesla’s Elon Musk – never afraid to think big – has already floated the possibility of building his own fab.