Semiconductors Archives | Digital Watch Observatory

Growing investment and energy plans reshape Armenia’s AI future

Armenia’s recent technology announcements are helping to form a clearer national AI strategy with stronger coordination. A memorandum with the US on semiconductors and AI now appears to be moving beyond symbolic commitment into action.

Momentum has accelerated with plans to expand a large-scale AI factory backed by significant investment. The project is estimated at around $4 billion and includes tens of thousands of advanced GPUs to support large-scale development.

The initiative is already entering construction, marking a shift from concept to execution in a short timeframe. Officials have described a broader vision of building a network of AI factories across the country.

Energy planning is becoming central, with discussions around deploying a small modular nuclear reactor to meet demand. Stable and scalable power is considered essential for sustaining long-term AI infrastructure growth.

Efforts are also targeting the wider ecosystem through a Virtual AI Institute and planned GPU access for startups. These steps aim to strengthen research capacity and ensure local participation in the country’s AI expansion.

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Memory chip shortage could last until 2030, SK chairman warns

Chey Tae-won warned that the global memory chip shortage could last for years, with structural supply constraints likely to continue into the next decade. Speaking on the sidelines of Nvidia GTC 2026 in San Jose, he said limited wafer capacity remains a key bottleneck for the semiconductor industry.

‘The shortage stems from a lack of wafer capacity, and securing additional wafers takes at least four to five years,’ Chey said. ‘We expect the industry-wide supply shortfall to persist at over 20 percent through 2030.’

He added that SK Hynix is implementing initiatives such as adjusting production schedules and diversifying supplier partnerships to stabilise prices. CEO Kwak Noh-jung is expected to provide further details on these new steps to manage volatility linked to the memory chip shortage.

Despite growing pressure to expand manufacturing overseas, Chey stressed that the group will prioritise domestic production to better respond to the ongoing memory chip shortage. ‘Building capacity outside Korea takes the same amount of time, regardless of location,’ he said. ‘Korea already has the infrastructure in place, allowing for a much faster response.’

He also highlighted the challenges of building fabrication plants abroad, including the need for reliable electricity and water supplies, as well as access to skilled engineering talent.

On competition in the high-bandwidth memory market, Chey noted that rising demand driven by artificial intelligence is reshaping supply dynamics. ‘AI requires graphics processing units (GPUs), and GPUs require HBM. We will do our best,’ he said, while cautioning that excessive focus on HBM could worsen the memory chip shortage for conventional DRAM used in smartphones and personal computers.

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EU delays tech sovereignty package with AI and Chips Act 2

The European Commission has delayed a flagship tech sovereignty package for the second time, according to its latest College agenda. The measures are now scheduled for adoption on 27 May, after previously being postponed from March to April.

The tech sovereignty package includes several major initiatives aimed at strengthening EU tech sovereignty, such as the Cloud and AI Development Act, the Chips Act 2, an open-source strategy, and a roadmap for digitalisation and AI in energy. European Commission officials have not provided a reason for the latest delay.

The Cloud and AI Development Act is expected to define what constitutes a ‘sovereign’ cloud and simplify rules for building data centres. The proposal is designed to accelerate infrastructure development as Europe seeks to compete in the global AI race.

Chips Act 2 will follow up on the EU’s earlier semiconductor strategy, which struggled to boost domestic chip production significantly. The new proposal is expected to refine industrial policy efforts to reduce reliance on foreign suppliers.

Meanwhile, the planned open source strategy aims to support European software ecosystems and reduce dependence on large US technology firms. By encouraging commercially viable open source projects, the EU hopes to strengthen its long-term digital autonomy.

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AI and robotics could offset impact of aging populations in Asia

Declining fertility rates have long been considered a major risk to economic growth, but analysts suggest the outlook may not be entirely negative for several advanced Asian economies. Rising investment in AI and robotics is increasingly viewed as a way to offset labour shortages caused by ageing populations.

According to analysts at Bank of America Global Research, technological innovation driven by AI and robotics could support productivity growth even as workforces shrink. Strong ecosystems in semiconductors, technology hardware, and industrial machinery allow some countries in the region to deploy advanced technologies faster and at lower cost than many other parts of the world.

South Korea currently has the highest robot density in the world, with about 1,012 industrial robots per 10,000 manufacturing workers. Chi n a has 470 and Japan 419, both significantly above the global average of 162, according to 2024 figures from the International Federation of Robotics.

Analysts say governments across East Asia are accelerating the adoption of AI and robotics to address demographic pressures. In particular, China, South Korea, and Japan have expanded investments in robotics, AI systems, and advanced manufacturing technologies to maintain economic productivity.

Population projections highlight the scale of the challenge facing these economies. By 2050, about 37 percent of Japan’s population and nearly 40 percent of South Korea’s population are expected to be aged 65 or older, while China’s share could reach around 31 percent.

Despite concerns about slowing growth, economists argue that advances in AI and robotics could weaken the traditional link between economic output and workforce size. Automation technologies not only replace routine tasks but also enhance human productivity in many industries.

A study by the Bank of Korea estimated that demographic pressures could reduce the country’s gross domestic product by 16.5 percent between 2023 and 2050. However, wider adoption of AI and robotics could limit the decline to around 5.9 percent under favourable conditions.

Some analysts caution that the economic benefits of automation may not be evenly distributed. While AI and robotics can improve productivity, technological gains often benefit capital owners and highly skilled workers more than others.

Economists also warn that consumption may slow as the number of households declines, while governments may face greater fiscal pressure from higher pension and healthcare costs. Policymakers may need to invest in workforce retraining and education to help workers adapt to the growing role of AI and robotics in the economy.

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China prioritises AI and tech self-reliance in new five-year plan

A new five-year development plan approved by lawmakers in Beijing places innovation and advanced technology at the centre of future economic growth. The strategy is designed to strengthen technological capabilities and position China as a leading global tech power.

The plan outlines ambitions to upgrade China’s industrial sector, expand domestic research capacity, and reduce reliance on foreign technologies. Priority sectors include AI, robotics, aerospace, biotechnology, and quantum computing. Officials see these industries as key drivers of economic growth over the coming decades.

AI features prominently in the strategy, with the term appearing dozens of times in the policy document. Beijing plans to expand AI-related industries, invest in large computing clusters, and support the development of advanced systems capable of performing complex tasks beyond traditional chatbots.

China also aims to increase spending on science and technology, with government research budgets rising by around 10 percent annually. The plan sets a target of expanding research and development investment by at least 7 percent per year, reflecting Beijing’s intention to strengthen domestic innovation capacity.

Efforts to achieve greater technological self-sufficiency come amid continued tensions with the United States over trade and technology restrictions. Export controls on advanced semiconductor technologies have highlighted China’s dependence on foreign chips, prompting the government to pursue breakthroughs across the semiconductor supply chain and emerging technologies.

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France pushes EU AI gigafactories to support European technology

In the EU, France is calling for planned European AI ‘gigafactories’ to focus on testing and scaling European technologies rather than primarily increasing demand for hardware from companies such as Nvidia.

The large computing facilities are intended to provide the infrastructure needed to train advanced AI systems. However, officials in France argue that the projects should strengthen Europe’s technological capabilities rather than reinforce reliance on foreign suppliers.

Several EU countries, including Poland, Austria and Lithuania, support using the infrastructure to improve Europe’s digital resilience.

The initiative forms part of the European Commission’s wider plans to expand computing capacity and support the development of a stronger European AI ecosystem.

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Switzerland is at the centre of a quiet rebellion in chip design

A Swiss-based open-source technology is quietly challenging the semiconductor industry’s concentration of power, in which most of the world’s digital devices depend on instruction set architectures licensed by just two companies: Intel in the US and ARM in the UK.

The RISC-V International Association, headquartered in Zurich since 2020, maintains an open-source alternative that allows chip designers to build without paying licensing fees or seeking permission from governments that control proprietary architectures.

The appeal has grown considerably. The association now counts more than 4,500 members, including US heavyweights such as Nvidia, Microsoft, and Google alongside Chinese giants Huawei, Tencent, and Alibaba, with Nvidia alone shipping over a billion RISC-V cores in 2024.

Switzerland’s political neutrality has been central to the association’s appeal, with its CEO Andrea Gallo describing the Zurich base as ‘a testament to our neutrality across all time zones, geographies and cultures.’

However, experts caution that RISC-V still faces a steep climb before it can challenge industry leaders. Frank Gürkaynak of ETH Zurich noted that the real challenge is not building a processor but assembling the entire software ecosystem around it, a task requiring hundreds of years of combined working hours.

The association is now collaborating with Linux to create an open-source trio of software, architecture, and hardware, with ambitions for RISC-V to become the global ISA of choice.

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Japan expands strategic investment in AI, quantum computing, and drones

Japan has identified dozens of advanced technologies as priority investment targets as part of an economic strategy led by Sanae Takaichi.

The plan aims to channel public and private capital into industries expected to drive long-term economic growth.

Government officials selected 61 technologies and products for support across 17 strategic sectors. The list includes emerging fields such as AI, quantum computing, regenerative medicine and marine drones.

Many of these technologies are still in early development, but are considered important for economic security and global competitiveness.

The strategy forms a central pillar of Takaichi’s broader economic agenda to strengthen Japan’s industrial base and encourage investment in high-growth sectors. Authorities plan to release spending estimates and implementation timelines by summer as part of a detailed investment roadmap.

Japan has also set ambitious market goals in several sectors. Officials aim to secure more than 30% of the global AI robotics market by 2040 while increasing annual sales of domestically produced semiconductors to ¥40 trillion.

Several Japanese technology companies could benefit from the policy direction. Firms such as Fanuc, Yaskawa Electric and Mitsubishi Electric are integrating AI into industrial robots, while Sony Group produces sensors used in robotic systems.

Chipmakers, including Rohm, Kioxia and Renesas Electronics, may also benefit from increased investment in semiconductor manufacturing and related supply chains.

Despite strong investor interest, analysts note uncertainty about how the programme will be financed, particularly as Japan faces rising spending pressures from social security, defence and public debt.

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AI chips exports face tighter US oversight under new proposal

Washington is considering rules that would require US government approval for overseas purchases of AI chips, tightening control over the global semiconductor supply chain. Draft proposals would make foreign buyers seek Department of Commerce authorisation before acquiring AI chips from US suppliers.

Furthermore, scrutiny will vary by order size, giving US authorities more oversight of international demand for advanced processors. The proposed rules could significantly expand oversight of leading semiconductor manufacturers such as NVIDIA and AMD, whose AI chips underpin many advanced AI systems.

The new approach to regulating exports of AI chips marks a shift toward a more interventionist strategy. Previously, during the Biden administration, an AI diffusion regulation was finalised to control the global spread of AI technology. Yet, before this rule could take effect, the current administration scrapped it. Building on these developments, the current proposed rules represent a new chapter in US AI export policy.

A US Department of Commerce spokesperson said the agency remains committed to ‘promoting secure exports of the American tech stack,’ but rejected claims that the government is reviving the earlier diffusion framework, calling it ‘burdensome, overreaching, and disastrous.’

Meanwhile, critics warn that tighter controls could have unintended effects. Restrictions on AI chip exports may drive international buyers to non-US suppliers, potentially weakening US leadership in advanced semiconductor technology as global AI hardware competition intensifies.

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Growing robotics market positions Qualcomm for next technology wave

Qualcomm expects robotics to become a significant business opportunity within two years, according to chief executive Cristiano Amon. The company is increasingly expanding beyond smartphones as it searches for new long-term growth markets.

Earlier this year, Qualcomm introduced its Dragonwing processor designed specifically for robotics applications. The chipset aims to operate across multiple robotic platforms using a scalable approach similar to its successful mobile processor strategy.

Industry enthusiasm for robotics has grown alongside rapid advances in AI technologies. Often described as ‘physical AI’, these systems allow robots to interpret surroundings and perform complex tasks more effectively.

Market forecasts suggest strong future demand, with analysts predicting robotics could develop into a multi-trillion-dollar global industry. Technology leaders across the semiconductor sector increasingly view intelligent machines as a major next computing platform.

Robotics innovation featured prominently at Mobile World Congress in Barcelona, where companies showcased emerging autonomous machines. Growing investment highlights intensifying competition to shape the future of AI-powered automation worldwide.

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