SMIC CEO Zhao Haijun warned of widespread panic across the semiconductor industry as memory chip supplies tighten, with shortages potentially lasting another nine months. The head of China’s largest contract chipmaker revealed that new production capacity could begin alleviating shortages by mid-2024.

Memory chips power everything from smartphones to electric vehicles, with pandemic-era disruptions and surging AI demand exacerbating supply constraints. $7 billion in recent Chinese government subsidies to SMIC aims to boost domestic chip production, though industry analysts question whether this can offset global shortfalls.

The comments highlight growing pressure on chip manufacturers as inventory levels dwindle. With SMIC controlling 5% of global foundry capacity, its nine-month timeline suggests continued supply chain headaches for electronics makers through 2024’s first half.