Key insights
- The article discusses the heavy reliance of HBM demand on AI-related capital expenditures. It raises concerns about potential risks, including AI glitches, data center power constraints, and a possible backlash against AI, which could lead to a significant drop in demand for HBM and GPUs, negatively impacting semiconductor companies. This poses a moderate downside risk to US equities, particularly in the tech sector.
Companies are spending Hundreds of Billions of dollars on AI and this is driving unprecedented demand for HBM (high density, high bandwidth DRAM) which is already sold out for 2026.
Semiconductor companies (The Big Three) are investing in additional capacity just to meet the perceived demand of 2028/2029.
AI 'glitches' are already happening and there has been a lot of noise about Data Centers burdening the already stressed out Power Infrastructure so what happens if a backlash stifles the current demand for AI?
Who will use all the GPUs and HBM being built?
HBM is driven by AI CapEx but will it survive if AI falters? : r/NLSTforumKnowledge