Delivery time breaks through 19 weeks, prices reach the highest monthly increase, "chip inflation" may become the next "life-or-death crisis" for AI trading.

Recently, investment firm Susquehanna stated in a latest report that the delivery cycle in the global semiconductor industry in June has further lengthened, and this trend remains significant even against a backdrop of rising prices. Analyst Christopher Rolland pointed out that in June, the delivery time in the semiconductor industry saw the largest single-month increase in this cycle, with an increase of 5 days to 19.4 weeks compared to the previous month. More notably, industry pricing saw the "largest single-month increase" in June, with a 5% increase compared to the previous month. The acceleration of delivery times and price increases occurring simultaneously highlight that the chip supply-demand situation is still tightening. Furthermore, the delivery time growth in June was "broad-based" - approximately 81% of the companies covered had stable or increasing delivery times, with all distributors experiencing growth. Delivery times for all product categories increased compared to the previous month, leading Rolland to believe that this "indicates that the upward cycle is now expanding beyond analog components." In terms of categories, the power discrete device sector remains tight, with delivery times for power integrated circuits and MOSFETs increasing by more than 10 days. Field-Programmable Gate Arrays (FPGAs) are also tight, with delivery times for Lattice Semiconductor Corporation (LSCC.US) and Xilinx, a subsidiary of AMD (AMD.US), extending by two weeks for the fifth consecutive month. Passive component supplies are also rapidly tightening with increased delivery times for Vishay (VSH.US) and Murata Manufacturing Co. (MRAAY.US). From an enterprise perspective, delivery times significantly increased for ON Semiconductor Corporation (ON.US), Diodes (DIOD.US), Renesas Electronics (RNECY.US), and Japan's Rohm Semiconductor (ROHCY.US), while Texas Instruments Incorporated (TXN.US), Microchip Technology Incorporated (MCHP.US), and Infineon Technologies (IFNNY.US) remained "overall stable." Companies like Skyworks Solutions, Inc. (SWKS.US), MaxLinear (MXL.US), and Coherent (COHR.US) also experienced substantial growth of over 10 days. The semiconductor sector has experienced a "roller coaster" market, with "chip inflation" potentially becoming the next major challenge in AI trading. Contrasting the continued tight supply-demand fundamentals, the chip stocks on the U.S. market experienced significant volatility in July. The Philadelphia Semiconductor Index fell by about 17% in July, although the year-to-date increase is still as high as 65%. The index fell by about 10% last week, marking the largest single-week decline in over a year, and has retraced by over 20% from its peak in June, officially entering a technical bear market. However, behind the sharp price fluctuations in the stocks, the simultaneous acceleration of delivery times and price increases seems to indicate a deeper structural contradiction emerging - "chip inflation." Julia Hermann, Global Market Strategist at New York Life Investment Management, recently warned that "chip inflation" - the soaring prices of AI-related logic chips and storage chips - will be the next headwind to test the resilience of AI trading. In an interview, she pointed out, "Super large-scale cloud service providers are now caught in a bind: on the one hand, there is the continuous rise in input costs - chips are becoming more expensive, combined with the rising costs in energy and utilities; on the other hand, realizing investment returns still requires years. We believe that this environment will truly test the market's belief - as long as investors still believe in the long-term potential of AI trading, they may be able to tolerate short-term fluctuations and a slowdown in realization pace." Data from the Asian markets are providing evidence for this concern. Hermann noted that one of the best indicators to observe the inflation of storage chips is the South Korean DRAM export price index. In past cycles, the growth rate of memory chip prices peaked at around 100% year-on-year, whereas today, the South Korean-produced DRAM has seen an increase of 370% year-on-year in prices. In her view, while the soaring chip prices are a sign of strong demand, it is also a double-edged sword - the continued high prices will significantly increase the construction costs of AI infrastructure, which in turn could suppress or even end the current boom in AI capital expenditures. Therefore, she is currently focusing on "quality" in the AI supply chain, which includes robust profitability, moderate profit fluctuations, and sufficient interest coverage. The chairman of SK Hynix, a major South Korean storage chip giant, recently issued a warning about chip inflation, stating that the long-term maintenance of high prices in the memory market is not normal. He predicts that next year (2027), global semiconductor demand will greatly expand, with AI demand growing by 60% to 100% compared to this year, and overall semiconductor demand increasing by at least 50% to 60%. However, the increase in new supply next year will be "almost zero," potentially widening the supply-demand gap. In response to concerns about the possible early end of this "super cycle" due to increased production, the chairman of SK Hynix provided an intriguing response: current chip prices are already at abnormally high levels and should naturally come down. If prices continue to rise and further exacerbate "chip inflation," the semiconductor industry will ultimately suffer a backlash. However, he explicitly stated that increasing supply and pushing prices back down does not mean companies cannot be profitable. Amid the intertwined pressures of tight supply and demand and volatile market fluctuations, the next steps for the semiconductor industry are becoming one of the most closely watched focal points in the global capital markets.