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AI Boom Fuels Global Chip Supply Chain Shake-Up
12 Feb
Summary
- TSMC is upgrading its Kumamoto plant to produce 3-nm chips for AI.
- Apple's 'Hermes orange' iPhone model boosted China sales significantly.
- AI advancements threaten to reduce headcount in India's tech outsourcing sector.
Global technology supply chains are undergoing significant shifts, largely driven by the escalating demand for artificial intelligence computing power. Taiwan Semiconductor Manufacturing Company (TSMC) is set to upgrade its second chip plant in Kumamoto, Japan, to produce advanced 3-nanometer chips, a move that underscores the critical need for AI hardware. This strategic upgrade aligns with Japan's ambition to revitalize its domestic chipmaking industry.
In China, Apple has experienced a notable turnaround in sales, primarily attributed to the striking 'Hermes orange' variant of its latest iPhone. This new model has helped reverse a multi-year sales decline in one of Apple's largest markets, with revenue jumping 38% year-on-year in the fourth quarter. This success highlights the importance of design and product differentiation in a competitive market.
Conversely, the rapid evolution of AI technologies is creating apprehension within India's IT outsourcing sector. Advances in AI tools, particularly AI agents and workplace automation, are expected to exert downward pressure on staffing levels. Companies like Tata Consultancy Services are already seeing market reactions, as the industry grapples with the implications of AI on employment and service delivery models.
Elsewhere, Chinese AI companies are actively engaging users ahead of the Lunar New Year. ByteDance, Tencent, and Alibaba are leveraging major events and promotions to attract new users and expand their market share in anticipation of increased consumer interest during the holiday season.
