18 September 2026
Executive Summary
Rapid expansion of artificial-intelligence infrastructure is intensifying a global shortage of memory chips used across data centres, computers, smartphones and other electronic equipment.
Chinese semiconductor manufacturer CXMT is preparing to enter the NAND flash-memory market as producers attempt to respond to sharply increasing demand.
NAND provides long-term data storage in products including:
- Data centres.
- Computers.
- Smartphones.
- AI systems.
- Industrial equipment.
The significance is not simply the arrival of another manufacturer.
Industry executives now expect the global memory shortage to continue through at least 2027.
SK Hynix chief executive Kwak Noh-jung has warned that 2027 could become the industry’s worst year for memory supply.
Manufacturers have prioritised investment in DRAM and high-bandwidth memory used by AI systems, restricting expansion of NAND capacity and contributing to shortages elsewhere in the market.
The AI infrastructure boom is therefore competing with conventional technology users for finite semiconductor manufacturing capacity.
UK Impact
UK businesses may encounter the consequences through higher prices or longer lead times for:
- Servers.
- Computers.
- Data storage.
- Smartphones.
- Network equipment.
- Industrial electronics.
- Cloud infrastructure.
- Automotive components.
The risk extends beyond technology companies.
Modern manufacturing equipment increasingly contains substantial amounts of memory and semiconductor technology.
A shortage of relatively inexpensive components can therefore delay delivery of much more valuable machinery.
Global Impact
Samsung remains the world’s largest NAND supplier by revenue, with approximately 29% of the market during the second quarter, followed by SK Hynix and Micron.
China is attempting to increase domestic production.
CXMT currently specialises primarily in DRAM but plans to establish a NAND research and development production line at its new Beijing facility.
The company has already held discussions with prospective customers.
However, it remains unclear when production would begin or whether the project will proceed from research and trial production into large-scale commercial manufacturing.
Businesses should therefore not assume this new capacity will solve near-term shortages.
The development also demonstrates how AI investment is reshaping manufacturing priorities across the semiconductor industry.
Our View
Businesses should treat semiconductor memory as a strategic component rather than an ordinary IT purchase.
Companies should ask:
- Which equipment depends upon memory chips?
- What are current supplier lead times?
- Are prices fixed?
- Can suppliers increase prices before delivery?
- Are alternative manufacturers approved?
- Are alternative components technically compatible?
- Could changing components require product recertification?
- Are critical replacement parts held in stock?
- Are IT refresh programmes dependent upon future availability?
- Could server expansion be delayed?
- Are cloud providers exposed to the same shortage?
- Are suppliers competing with AI customers for manufacturing capacity?
- Could used or refurbished equipment provide temporary resilience?
- Are critical systems dependent upon one hardware platform?
- Should procurement orders be placed earlier?
There is a wider lesson.
The enormous investment flowing into AI does not consume only electricity and data-centre capacity.
It also consumes physical manufacturing capacity and components used by the rest of the economy.
Businesses outside the AI sector can therefore experience AI-related supply-chain disruption without using AI themselves.
Risk Indicator: HIGH – SEMICONDUCTORS, AI & TECHNOLOGY SUPPLY CHAINS
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The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
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