AI and semiconductors drive a new resource race reshaping global economies

Summary

Artificial intelligence is transforming semiconductors from a technology component into a strategic economic resource, reshaping investment flows, industrial policy and geopolitical influence. As demand for AI infrastructure accelerates, countries and companies that control critical parts of the semiconductor supply chain are gaining economic advantages comparable to those once associated with major oil-producing nations.

NEW DELHI, June 24, 2026 — The rapid expansion of artificial intelligence is elevating advanced semiconductors into one of the world’s most strategically important economic assets, driving a global competition for manufacturing capacity, technological leadership and supply-chain control.

The shift reflects a broader transformation in how economic power is created. During the twentieth century, oil was the essential resource underpinning industrial growth. In the AI era, advanced semiconductor chips have become the foundation of digital infrastructure, powering everything from data centres and cloud computing platforms to generative AI systems and autonomous technologies.

Governments and corporations are increasingly treating semiconductor capabilities as a matter of economic security. The ability to design, manufacture and package advanced chips is now viewed as critical for maintaining competitiveness in the global economy.

The growing importance of semiconductors is reflected in industry growth. According to the Semiconductor Industry Association (SIA), global semiconductor sales rose 25.6% year-on-year to a record $791.7 billion in 2025, with the industry projected to reach approximately $1 trillion in sales during 2026 as AI-related demand continues to expand. 

Semiconductor growth reshapes investment flows

The AI boom has concentrated investor attention on companies that occupy key positions in the semiconductor value chain. Chip designers, foundries and memory manufacturers have become major beneficiaries of rising spending on AI infrastructure.

Leading companies such as Nvidia, Taiwan Semiconductor Manufacturing Company, Samsung Electronics and SK Hynix are increasingly viewed as critical enablers of the global AI ecosystem.

Logic chips generated $301.9 billion in sales during 2025, making them the industry’s largest product category, while memory products recorded sales of $223.1 billion, up 34.8% from the previous year. The growth was driven largely by demand for AI accelerators, high-bandwidth memory and data-centre hardware. 

As a result, capital is flowing toward economies that host advanced semiconductor manufacturing clusters, reinforcing the strategic importance of technology leadership.

Taiwan and South Korea remain central to the AI supply chain

Taiwan continues to occupy a uniquely important position in the semiconductor industry through TSMC, the world’s leading contract chip manufacturer. The company produces many of the most advanced chips used by global technology firms, making Taiwan a critical link in the AI supply chain.

Industry observers often refer to this strategic role as a “silicon shield,” reflecting the global dependence on Taiwan’s advanced semiconductor manufacturing capabilities.

South Korea has established a similarly important position through its dominance in memory technologies. Demand for high-bandwidth memory, a crucial component in AI systems, has strengthened the role of companies such as Samsung Electronics and SK Hynix as indispensable suppliers to the global technology industry.

Meanwhile, the United States remains the centre of advanced chip design and AI platform development, with companies including Nvidia benefiting from massive investments by hyperscale cloud providers and technology firms.

Governments expand support for domestic chip industries

Recognising the strategic importance of semiconductors, governments around the world are increasing support for domestic manufacturing and supply-chain resilience.

The United States continues to implement incentives through the CHIPS and Science Act, while Europe, Japan, South Korea and other economies have launched similar initiatives aimed at strengthening local semiconductor ecosystems.

India has also intensified efforts to build domestic capabilities through its semiconductor incentive programmes, seeking to attract fabrication, packaging and testing investments while reducing reliance on imported technology.

These initiatives reflect a broader recognition that access to advanced computing infrastructure is increasingly tied to national competitiveness, technological sovereignty and economic growth.

While semiconductor manufacturing requires specialised expertise, advanced equipment and substantial capital investment, its influence on modern economies now rivals that of traditional strategic resources. As AI adoption accelerates across industries, control over key segments of the semiconductor value chain is expected to remain a major source of economic and geopolitical influence.

Why this matters

• AI is driving unprecedented chip demand: Global semiconductor sales reached a record $791.7 billion in 2025 and are projected to approach $1 trillion in 2026 as AI infrastructure spending accelerates. 
• Technology leadership is becoming a strategic asset: Countries that host advanced chip design, manufacturing and memory production are attracting investment and strengthening their economic influence.
• Governments are increasing intervention: Semiconductor subsidies and industrial policies are becoming central tools for securing technological competitiveness and supply-chain resilience.
• Supply-chain concentration remains a risk: Heavy reliance on a limited number of advanced manufacturing centres increases vulnerability to geopolitical tensions and operational disruptions.

FAQs

Q1: Why are semiconductors often compared to oil?

Both are foundational resources for their respective eras. Oil powered industrial economies, while semiconductors underpin AI, cloud computing and digital infrastructure.

Q2: How large is the semiconductor market today?

Global semiconductor sales reached $791.7 billion in 2025 and are projected to reach roughly $1 trillion in 2026, according to the Semiconductor Industry Association. 

Q3: Why is Taiwan important to the semiconductor industry?

Taiwan is home to TSMC, the world’s leading advanced semiconductor foundry, which manufactures many of the chips used in AI and high-performance computing systems.

Q4: What role does South Korea play in AI infrastructure?

South Korea is a leading producer of memory chips, including high-bandwidth memory used in advanced AI systems and data centres.

Q5: How is India participating in the semiconductor race?

India is expanding incentives and industrial policies aimed at attracting semiconductor manufacturing, packaging and testing investments while building domestic capabilities.