By Hamza Faisal
The artificial intelligence boom is quietly reshaping who gets chips — and who waits. German wafer maker Siltronic says surging demand for AI hardware is redirecting semiconductor supply toward data centres and away from smartphones and PCs, constraining some end markets even as the chip industry posts strong growth.
Siltronic chief executive Michael Heckmeier made the remarks in an interview with Reuters on Wednesday, the same day the company raised its annual sales forecast for the second time this year, citing stronger demand for its wafers. Siltronic makes the silicon wafers on which semiconductors are built, placing it at the very start of the chip supply chain.
AI servers eat three to four times the silicon
The imbalance is not just about how many AI servers are being built, but how much silicon each one consumes. Heckmeier said AI server farms use roughly three to four times more silicon area than traditional servers, a multiplier that is boosting demand for advanced wafers far beyond the growth in server volumes alone.
AI-linked demand has become the chip industry's main growth engine, he said, but the shift has a cost elsewhere. Some other semiconductor end markets could grow faster if more chips were available, Heckmeier told Reuters — they are not shrinking because demand is weak, but because supply is being pulled toward AI.
"It's not that AI is offsetting certain weaknesses," Heckmeier said. "It's more AI is generating a certain weakness."
The deepest pockets win
The reason is straightforward economics. When chipmakers can choose which markets to serve, they send their output where it earns the most — and right now, that is AI. "When our customers have the choice to sell their chips to different segments, they will always send them to the ones that pay best," Heckmeier said. "The pockets of the AI players, particularly the hyperscalers, are the deepest."
The hyperscalers — the giant cloud operators building out AI data centres — are spending at a scale that smaller end markets cannot match. That spending power is effectively setting the queue for the world's chip supply, with smartphones, PCs and other devices further back in line.
For consumers, the warning is a familiar one in a new form: the last time chip supply tightened, it was a shortage. This time, the chips exist — they are simply going somewhere else first.
A natural balance if AI cools
Heckmeier was sanguine about what happens if the AI boom eventually moderates. Any slowdown would not necessarily derail the industry's growth, he argued, because capacity could flow back to smartphones, PCs and other markets where underlying demand remains solid.
"We don't see it at all today," Heckmeier said of any slowdown in AI demand. "But even if it came, we feel there is a natural balance in the system that the overall growth dynamics could go on."
Siltronic's second forecast upgrade of the year underlines the point: for now, the wafer business is riding the AI wave. The open question is how long the rest of the electronics industry is willing to wait in its wake.
