The global semiconductor supply chain faces a structural bottleneck that is unlikely to ease before 2029, as the construction of new fabrication plants requires two to three years to reach operational capacity.
This timeline implies that supply constraints will persist well beyond 2028, countering narratives of an imminent oversupply in the market.
This structural reality stands in contrast to the recent sharp selling pressure observed in global semiconductor equities.
Market participants have been grappling with fears of an AI-driven supply glut, a scenario dubbed the "chipwreck," alongside broader concerns regarding interest rate trajectories.
The disconnect between the long-term supply deficit and short-term sentiment has created a volatile trading environment for chip stocks.
The delay in bringing new capacity online means that companies relying on advanced semiconductors for AI infrastructure and consumer electronics will continue to face allocation risks.