The hardware industry cycle driven by generative AI is far from over; short-term fluctuations do not alter the sector's long-term high-growth trajectory. As the demand for AI computing power expands and supply chain bottlenecks spread, core components—such as PCBs, copper-clad laminates (CCLs), and IC substrates—will face widespread shortages, becoming the critical constraint on AI server production capacity.
Global demand for AI computing infrastructure continues to exceed expectations. The number of data center projects under construction worldwide has risen from 240 in March of this year to 280, with simultaneous expansion in gigawatt-scale computing projects. Institutions have raised their industry forecasts, projecting a continued climb in global data center deployment capacity through 2026–2027 and a massive release of demand for AI chip hardware in 2027–2028. Coupled with intensified investment from traditional cloud giants like Microsoft and Google alongside emerging AI computing firms, AI capital expenditure has yet to enter a contraction phase, pushing the industry's peak growth period further into the future.
AI supply chain bottlenecks have spread from the traditional constraint of TSMC’s advanced CoWoS packaging capacity to core components across the mid- and downstream sectors. Starting in the second half of 2026, systemic supply-demand imbalances will emerge for supporting materials—including PCBs, CCLs, IC substrates, high-end capacitors, and optical components—with shortages intensifying in 2027. Given the two-year lead time required to expand high-end production capacity, the industry's supply growth lags significantly behind the explosive demand for computing power.
This supply-demand mismatch has significantly boosted the bargaining power of upstream component manufacturers, creating opportunities for sustained price increases and rising profitability in sectors like PCBs. Meanwhile, AI computing orders are prioritizing high-end component capacity, further squeezing material supplies for consumer electronics and automotive electronics. Benefiting from the high-growth momentum across the entire supply chain, Nomura has sharply raised its growth forecast for the global server industry; investments in AI infrastructure are driving the continuous expansion and upgrading of core supporting industries, such as PCB manufacturing.
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