MediaTek warns AI boom straining supply chains, costs

Taiwan’s leading chip design company MediaTek has warned that surging demand for artificial intelligence technology is putting pressure on global supply chains, forcing the company to adjust pricing to reflect rising costs.

Company executives said the rapid expansion of AI applications across industries is driving strong demand for semiconductors but is also creating supply shortages and increasing production costs across the global technology sector, News.Az reports, citing Reuters.

MediaTek Chief Executive Rick Tsai said the company remains confident about long-term growth driven by AI, but acknowledged that supply chains are struggling to keep up with demand in 2026. He said MediaTek plans to adjust product pricing and prioritize supply allocation based on profitability.

Taiwanese semiconductor companies have become central players in the global AI boom. Firms like MediaTek and chip manufacturing giant TSMC have seen strong business growth as demand for advanced chips continues to surge, particularly from AI-focused technology companies.

MediaTek also expects significant long-term revenue from AI accelerator chips used in data centers. The company said it expects to generate billions of dollars in revenue from AI-specific chips by 2027.

The market for data center AI chips is expanding rapidly. MediaTek estimates the total addressable market for data center ASIC chips has grown to between $50 billion and $70 billion — about $20 billion higher than previous estimates.

The company has partnered with major AI hardware players to co-develop advanced chips used in high-performance computing and AI systems. MediaTek executives said they have seen strong market feedback for new AI computing hardware launched in recent years.

MediaTek reported fourth-quarter revenue growth of nearly 9% year-over-year, although net income declined slightly. The company’s stock has also performed strongly, rising significantly this year and outperforming Taiwan’s broader stock market index.

Industry analysts say the AI boom is creating both opportunity and pressure for semiconductor companies. While demand growth is accelerating, supply chain capacity and component availability remain key challenges across the global chip industry.

News.Az 

By Aysel Mammadzada