As mentioned in the previous article, AI Agent is the inflection point because AI demand is no longer limited by human attention. This has created many shortage in the whole AI supply chain. The biggest beneficiaries right now are the memory players, all 3 oligopolies in the memory industry has crossed the US$1 trillion market cap milestone.

The rise in Samsung, SK Hynix and Micron is because of:

1. Huge imbalance in supply-demand for memory; and

2. Oligopoly market structure in the memory space.

Right now, the bottleneck is in semiconductors (and will continue to be constrained). Moving forward, it’s expected that constrain will start to move towards the power layer.

Power Constraint

When we say the constraint is in the power layer, you might think of the power generation, but that’s not the full picture. There are 3 perspective to the power constraints:

• Off-site power generation: Power plant far away from end-user, electricity generated delivered through electric grid

• On-site power generation: Power plant in data centers, e.g. gas turbines, solar, nuclear etc

• Power semiconductor: Devices that convert, control and distribute electricity once power reach data center and AI rack

We will focus on power semiconductor because there is an upcoming catalyst for a ramp up in this area soon: Nvidia pushing for 800VDC (VDC means “Volts Direct Current") for the next generation Rubin Ultra/Kyber system starting in 2027.

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