Industry Middle East Conflict Could Trigger a ‘Black Swan’ For Chips, Pushing the Industry Into a Period That Could Be Devastating for AI Muhammad Zuhair • at EDT Add on Google Image NVIDIA’s Vera Rubin Racks Are the Costliest to Date, but AI Giants Are Willing to Pay Anything to Avoid Becoming the Next Yahoo Barclays research team points out that the Middle East conflict has entered its third week, which coincides with the typical shipping cycle for crude oil and natural gas from the Middle East to North Asia. As time goes on, the impact of energy disruptions will gradually become apparent, and the market's focus has shifted from whether oil prices will break through $100 per barrel to whether the semiconductor industry can maintain its power and raw material supply. - Ctee The effects on Taiwan and South Korea following the Middle East conflict are far greater than in other regions of the world, mainly because these nations are heavily dependent on the Strait of Hormuz for their oil supply. It is claimed that the above nations have ample stockpiles to sustain a conflict, but at the same time, a large portion of those reserves is dedicated to "petrochemical applications", meaning that Taiwan and South Korea, for power generation, are dependent on their import networks. The report notes that LNG stockpiles are the immediate concern for these countries, as Taiwan reportedly has enough for only 11 days. This indicates that electricity generation is expected to pose a significant challenge for Taiwan in the near future. More importantly, TSMC accounts for more than 10% of Taiwan's total electricity output, meaning any disruptions could have a profound effect on TSMC's semiconductor production lines. Taiwan's vulnerability also stems from the nation's phased-out efforts to generate electricity from coal, in line with environmental policies. Image NVIDIA, AMD, and others in the AI industry to reconsider deployment/delivery plans, triggering a 'domino effect' that would affect the broader AI infrastructure buildout. The reliance on Taiwan and South Korea by Big Tech indicates that these companies would be affected by the Middle East conflict as well, and considering how the AI buildout has driven America's economy in recent times, there's no doubt that if the conflict deepens, the aftershocks will be felt by everyone involved in the AI race. Follow on Google to get more of our news coverage in your feeds. Further Reading NVIDIA CEO Says Gamers Are “Completely Wrong” About DLSS 5 Being ‘AI Slop’, Insisting Developers Have Full Artistic Control NVIDIA Launches NemoClaw to Fix What OpenClaw Broke, Giving Enterprises a Safe Way to Deploy AI Agents NVIDIA Sees Compute Revenue Exploding to $1 Trillion in Just Two Years, as AI Hits an ‘Inflection Point’ With Inference “No GeForce, No AI,” Declares NVIDIA’s Jensen Huang, as He Celebrates 25 Years of GeForce 3, the GPU That Started Everything Read all on Middle East Conflict Could Trigger a ‘Black Swan’ For Chips, Pushing the Industry Into a Period That Could Be Devastating for AI
