China’s largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), expects global AI chip shortages to continue through 2027. Rising demand from data centers and private cloud infrastructure is putting increasing pressure on semiconductor supplies worldwide.
SMIC Co-CEO Zhao Haijun shared this forecast on November 13, 2026, amid concerns about a possible artificial intelligence market bubble. He believes the AI industry remains in its early stages, with demand for computing resources continuing to increase.
Zhao said many customers are still struggling to secure enough computing resources for their operations. Growing investments in AI infrastructure are increasing pressure on semiconductor manufacturers and limiting their ability to meet demand.
AI Data Center Demand Keeps Chip Supply Under Pressure
The rapid growth of artificial intelligence infrastructure is driving higher demand for semiconductors across global markets. Technology companies are spending billions of dollars on data centers to support AI training, inference, and cloud computing services.
SMIC expects strong demand to keep the global AI chip supply chain under pressure through 2027. The company also reported rising demand for private cloud infrastructure as businesses develop computing systems for their AI applications.
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The supply shortage highlights the growing gap between computing demand and available semiconductor manufacturing capacity. Although chipmakers are increasing production, expanding manufacturing capacity requires substantial investment and specialized equipment. Building new production facilities also takes time, making it difficult to meet rising demand quickly.
Zhao also warned that shortages could continue beyond 2027 for certain semiconductor products. He expects computing power and supporting chips to remain in short supply through mid-to-late 2028.
SMIC Faces Longer Semiconductor Equipment Delivery Times
SMIC is facing longer delivery times for semiconductor manufacturing equipment as global demand for chip production continues rising. CEO Zhao warned that some equipment orders now come with delivery timelines exceeding 24 months.
These delays could affect SMIC’s capital expenditure plans for 2026. Longer equipment delivery times make it harder for semiconductor manufacturers to expand production capacity and meet growing customer demand.
The company is increasing its capacity utilization to handle rising demand for semiconductor manufacturing services. However, limited equipment availability could slow SMIC’s production expansion and restrict how quickly new capacity becomes operational.
SMIC also expects depreciation expenses to rise approximately 30% year over year in 2026. This increase reflects higher costs from manufacturing investments, equipment purchases, and efforts to expand production capacity.
Memory Chip Shortages Could Continue Until 2028
SMIC expects the global memory semiconductor market to face supply shortages beyond 2027. CEO Zhao said memory chip supply and demand could reach balance between mid-2028 and late 2028.
This forecast shows growing supply pressures across different segments of the semiconductor industry. AI infrastructure requires various chips, including processors, high-bandwidth memory, and other supporting semiconductor components.
Data centers need large amounts of high-performance memory to process increasingly complex artificial intelligence workloads. As technology companies expand their AI infrastructure, memory manufacturers face greater pressure to increase production and meet rising customer demand.
However, expanding memory production may take longer than the growth in AI computing demand. This could keep memory chip supplies constrained until manufacturers can increase output enough to meet market requirements.
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AI Chip Demand Remains Strong Despite Market Bubble Concerns
SMIC’s latest forecast comes as investors increasingly question whether the artificial intelligence industry is facing an investment bubble. Major technology companies continue spending billions of dollars on AI infrastructure, semiconductor development, and data center expansion.
However, Zhao believes the AI industry is still in its early stages, with demand for computing resources remaining strong. His comments indicate that SMIC does not expect demand for AI chips to weaken significantly in the coming years.
The company’s outlook also highlights the growing pressure on semiconductor manufacturers to meet rising demand. Chipmakers must expand production capacity while managing equipment shortages and longer manufacturing timelines.
Meanwhile, data center construction and private cloud adoption continue driving demand for AI semiconductors. These trends could keep chip supply constraints in place through 2027 and potentially into 2028.
