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AI Chip Shortage To Disrupt Hardware Supply Chains

Scott Mordue
Scott Mordue
January 21, 2026

Organisations planning to upgrade their IT infrastructure need to move quickly to secure hardware amidst warnings that the AI boom is set to cause major supply chain issues.

The rapid acceleration of artificial intelligence adoption – particularly generative AI and large-scale model training – has had a major impact on semiconductor manufacturer priorities. 

Global demand for memory chips is now outpacing supplies as manufacturers prioritise delivery of high-capacity solutions for AI infrastructure projects. The result is tightening supply and rising costs for everyone else, along with increased procurement risk for enterprise IT buyers.

What’s Causing The Memory Chip Shortage?

The cause of the crisis is simple – explosive demand for high-performance chips used in AI training and inference. 

Unlike other kinds of enterprise workloads, AI model training in particular requires:

  • Massive GPU clusters
  • High-bandwidth memory (HBM)
  • Advanced packaging technologies
  • Leading-edge fabrication nodes (5nm, 3nm and below).

Manufacturers are therefore prioritising their production capacity towards these high-margin AI components. This limits the production and availability of other chips, such as those used in servers, networking equipment, laptops and unified communication (UC) systems.

Andrew Roberts, managing director of technology solutions specialist Avoira, explains what’s happening:

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“Manufacturing capacity is being focused on serving memory-hungry data centres at the expense of consumer and enterprise electronics,” 

“Put bluntly, they’re moving where the money is. The margins for high-bandwidth and high-capacity memory modules are more substantial than those which serve mainstream applications.”

“As a result chips are becoming scarce, with major hardware vendors already warning of likely shipping delays. That scarcity is fuelling significant increases in the cost of chips which ultimately will ripple along the supply chain and result in price rises for hardware.”

Dr. Andrew Roberts - Avoira

Unfortunately, this issue could linger for potentially years to come. As advanced memory and leading-edge chips require complex fabrication and packaging processes, expanding capacity is not quick or simple. Building new fabrication facilities can potentially take years and billions in capital investment to complete. 

For a deep-dive into the causes of the AI-driven chip shortage, take a look at this blog from tech market intelligence specialist IDC.

Price Increases

Warning that shortages are likely to echo those seen during the pandemic, Avoira’s Andrew Roberts added that supply chain issues have already seen one major vendor of desktops, servers and network switches increase prices by up to 30%.

Several factors are contributing to price inflation, such as:

  • Scarcity of high-bandwidth memory
  • Premium pricing for AI-optimised components
  • Increased fabrication costs
  • Competition from hyperscale cloud providers
  • Reduced discounting power in a seller’s market

Companies sourcing supplies also need to act fast to avoid missing out, or end up paying through the nose. One data cloud specialist has cut the time for which it will honour quotes to just two weeks.

All of this is likely to have a significant knock-on effect on procurement. 

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“The combination of hardware shortages and narrower quote windows will undoubtedly impact technology procurement.”

“IT and finance professionals are going to need to act swiftly to insulate their organisations from a shockwave which is set to reverberate well into next year,”

Dr. Andrew Roberts - Avoira

What does this mean for your organisation?

Unfortunately, the AI chip shortage doesn’t just affect companies building AI models. Any organisation looking to procure IT hardware over the next 12 to 18 months may experience:

  • Budget pressure – capital expenditure plans may need to be revisited as hardware costs rise. Projects that have already been approved may require financial reassessment
  • Longer lead times – hardware that once shipped in weeks could now take months
  • Reduced negotiating power – with demand exceeding supply, vendors have less incentive to offer aggressive discounts. You’re likely to face firmer pricing and stricter commercial terms.
  • Greater procurement risk – shorter quote windows and price volatility may increase your exposure to financial and operational risk if purchase orders are delayed.
  • Delayed transformation initiatives – digital transformation, security upgrades and compliance-driven projects could face disruption if hardware cannot be sourced in time.

How Avoira Can Help

It’s important to act now if you are looking to initiate or deploy an IT upgrade involving:

Over the next 12-18 months it may be difficult for us to guarantee continuity of supply and we anticipate significant price volatility.

With this in mind, it’s important to anticipate your future hardware requirements earlier than you might normally.

Our product experts here at Avoira are on hand to advise and assist you in sourcing the technology you require, including recommending appropriate alternatives where necessary. Get in touch to discuss your needs.