Supply chains still fragile

The world’s chip supply chain is getting harder to stabilize, and the bill is showing up in electronics prices, insurance costs, and factory budgets. (bangkokpost.com) (deloitte.com) In Thailand, Federation of Thai Industries honorary chairman Supant Mongkolsuthree said on April 16 that artificial intelligence, data centers, cloud services, and robotics are soaking up memory chips that had been used in laptops, smartphones, appliances, and power equipment. He said random access memory prices have more than doubled this year, and some reports put first-quarter 2026 memory-chip price gains at as much as 90%. (bangkokpost.com) Supant said low- to mid-range laptop prices could rise 10% to 15%, and smartphone makers, especially Android brands, are also facing higher costs. He said manufacturers are likely to pass those costs on to consumers. (bangkokpost.com) A semiconductor is the small control-and-memory part inside phones, servers, cars, and factory gear, and demand is now tilting toward the chips used in artificial intelligence systems. Deloitte said global semiconductor sales are expected to reach $975 billion in 2026, with generative artificial intelligence chips approaching $500 billion in revenue, or about half of industry sales. (deloitte.com) That revenue is concentrated in a tiny slice of output. Deloitte said artificial intelligence chips may account for roughly half of industry revenue in 2026 while representing less than 0.2% of total unit volume, leaving slower-growing markets such as smartphones, computers, and automotive chips competing for the rest of the system. (deloitte.com) Governments and manufacturers are trying to reduce that dependency by moving production closer to customers, but that strategy carries a large upfront cost. Taiwan Semiconductor Manufacturing Company said in March 2025 that it would add $100 billion to its United States build-out, bringing its planned U.S. investment to $165 billion. (tsmc.com 1) (tsmc.com 2) That Arizona project has expanded in stages: Taiwan Semiconductor Manufacturing Company announced a $12 billion Phoenix fab in May 2020, raised the commitment to $40 billion in December 2022, said in April 2024 that its Arizona program had reached $65 billion with a planned third fab, and then raised the U.S. total to $165 billion in March 2025. The U.S. Department of Commerce finalized up to $6.6 billion in CHIPS Act funding for the project in November 2024. (tsmc.com 1) (tsmc.com 2) (nist.gov) Risk around the supply chain is not limited to factories. Marsh said in its 2025 Political Risk Report that geoeconomic and geopolitical uncertainty is forcing companies to protect supply chains against a wider range of disruptions, while Allianz Trade said in May 2025 that 54% of surveyed companies ranked geopolitical and political risks and social unrest among their top three supply-chain threats. (marsh.com) (allianz.com) Shipping insurance has already shown what that looks like in practice. Reuters reported in July 2025, as cited by Insurance Journal, that Red Sea war-risk premiums rose to about 1% of a ship’s value from 0.2% to 0.3% during a calmer period, after renewed Houthi attacks pushed insurers to charge more for a single transit. (insurancejournal.com) PwC said in its 2026 semiconductor outlook that export controls, restrictions on critical materials, and shifting trade alliances are reshaping the industry even as governments push domestic production. The result is a supply chain that is broader and more duplicated than the old just-in-time model, but also more expensive at nearly every step. (pwc.com) The next test comes when chip demand cools or spikes again. For now, companies are paying for backup capacity, countries are paying for local fabs, and consumers are starting to pay more for the devices that need the chips. (deloitte.com) (bangkokpost.com)