$1.3 trillion evaporated from the chipmaker market: the real threat is not in semiconductors
Over the past month, the market capitalization of leading chip manufacturers has shrunk by more than $1.3 trillion. However, if you think the market is punishing companies for a decline in demand for semiconductors, you are mistaken. An analysis of fundamentals and production chains shows: the problem lies not in the chips, but in the infrastructure that supports them.
The paradox of the situation is that amid the stock collapse, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) reported a record quarter. Revenue reached $40.2 billion, the growth forecast was raised to over 40%, and management described confidence in the AI megatrend as "very high." TSMC's profit rose by 77% and hit an all-time high, margins exceeded all previous figures, and the company will allocate an additional $100 billion to build factories in Arizona.
Bottlenecks in the Supply Chain
As my analysis shows, the real problem lies in two bottlenecks not directly related to silicon production. The first is chip packaging. The CoWoS technology, which connects the processor to memory, is already operating at its limit. Nvidia buys up about 60% of the capacity, and demand for this service has tripled over the past two years. TSMC is nearly doubling production, but the lines are still running at 100% capacity.
The second, and far more serious, constraint is energy infrastructure. A finished chip is useless without electricity, and the industry is acutely short of it. Data center statistics confirm the energy deficit: companies have announced 16 gigawatts of capacity in the US for 2026, but are only building 5 of them. The remaining projects are frozen, and 25% do not even have an energy supply plan.
Transformers and Turbines: The Invisible Crisis
The root of the problem lies in equipment that the market almost never thinks about. This refers to high-voltage transformers that convert grid energy into power for data centers. Currently, their manufacturing takes an average of 48–60 months, whereas before 2020, 12 months sufficed. The shortage will persist for a long time: Hitachi, Siemens Energy, GE Vernova, and ABB — just four manufacturers of such units — have taken orders years in advance. At Siemens Energy alone, the portfolio volume has reached nearly €136 billion.
The problem begins at the raw material level. Special electrical steel for transformers is produced by only five companies worldwide, and they are unable to ramp up production quickly. Bypassing the shortage is also not an option: data center operators have ordered gas turbines, but GE Vernova, Siemens, and Mitsubishi have already sold their capacity for about five years ahead or more.
The timeline of constraints looks like this: chips are produced without delays, packaging capacity is fully booked, new transformers will appear in 2029, and turbines in 2030. The largest construction project in economic history is being held back by heavy electrical equipment that is manufactured almost by hand.
My conclusion: traders were dumping chipmaker stocks out of fear of falling demand, but the data points to a supply shortage. The winners could be transformer and turbine manufacturers, grid companies, and owners of sites with ready energy connections. The world's leading companies now have to build their own power plants to run neural networks. The AI story is no longer about intelligence — it's about electricity. The market was counting chips, when it should have been counting substations.