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Systems in depth

One section per system: its state at evidence close, its exposures and what the operational series will watch.

12 min read0 figures5 tables31 notesNR-XTECH-SEMICONDUCTORS-GLOBAL-2026-BASELINE

Contents
  1. ·Edition home
  2. ·Executive summary
  3. 1AI compute is physical infrastructure built on a few chips and a few places
  4. 2Key findings
  5. 3Systems and sectors at baseline
  6. 4Risks and capability
  7. 5Compute build-out meets local power, water and packaging limits
  8. 6Readings from the other desks
  9. 7The 2027 agenda
  10. 8Systems in depth
    1. 8.1 Compute hardware and fabrication
    2. 8.2 Energy, power and water
    3. 8.3 Equipment, memory and materials
    4. 8.4 Economy, investment and workforce
    5. 8.5 Security, export controls and governance watch
  11. AMethodology
  12. BData appendix
  13. CReferences and record
  14. ·Complete edition, for print

8.1Compute hardware and fabrication

AI compute is built from advanced logic and memory chips made in a few clusters. Market figures are strong; counts of chips and capacity by place are thin.

791.7USD billion

global semiconductor sales, 20258

301.9USD billion

logic sales, 20258

9months

AI supercomputer performance doubling1

Table 8.1State at baseline
ComponentStateEvidenceStatus
Logic and memorylogic USD 301.9 billion and memory USD 223.1 billion of sales in 20258Reported
AI supercomputersperformance doubling about every nine months; one 2025 system used about 200,000 chips1Reported
Foundry concentrationpress reports give the largest foundry nearly 70% of 2025 foundry sales; about 74% of its wafer revenue came from 7 nanometre and smaller nodes222728Reported
Vendor productsone vendor lists 208 billion transistors per accelerator on a custom 4NP process; a vendor claim19Reported

Couplings

  • INF ↔ FIN sales and plants
  • AIC → INF demand
  • TRD → INF controls

Evidence to bind in 2027

  • chip and accelerator volumes by type
  • fabrication capacity by country

Related editions

  • GLB Global Systems
  • GS-02 Energy
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-04 Critical Minerals and Strategic Materials
  • XT-01 Artificial Intelligence and Agentic Systems
  • XT-07 HPC and Advanced Computing

8.2Energy, power and water

Compute and fabrication need electricity and cooling water. US data centre use is documented; plant water use is reported by single companies.

176TWh

US data centre electricity, 202315

325 to 580TWh

US projection for 202815

1 to 5GW

campus size likely possible by 2030, Epoch AI estimate3

Table 8.2State at baseline
ComponentStateEvidenceStatus
Data centre electricityUS use 176 TWh in 2023, about 4.4% of national electricity1516Reported
Global data centre electricityabout 415 TWh in 2024 and about 945 TWh in 2030 in the IEA base case, from search summaries24Reported
Efficiencyhardware efficiency rose about 40% a year; sparse models can use under a tenth of the energy of dense ones57Reported
Fab waterone company reports about 5,300 acre-feet a year for one fab and a 65% reclamation rate23Reported

Couplings

  • AIC → ENE load growth
  • ENE ↔ WAT cooling and process water
  • ENE → CLI emissions

Evidence to bind in 2027

  • plant and data centre water use
  • global electricity series from the report itself

Related editions

  • GLB Global Systems
  • GS-02 Energy
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-04 Critical Minerals and Strategic Materials
  • XT-01 Artificial Intelligence and Agentic Systems
  • XT-07 HPC and Advanced Computing

8.3Equipment, memory and materials

Chips depend on specialised tools, memory stacks and minerals. Equipment billings are documented through a trade report; materials figures are not bound.

135.1USD billion

equipment billings, 20259

≈79%

share in China, Taiwan and Korea, derived9

90%

growth of equipment billings in Taiwan, 20259

Table 8.3State at baseline
ComponentStateEvidenceStatus
Equipment billingsUSD 135.1 billion in 2025, up 15%; North America down 20% and Europe down 41%9Reported
LithographyMoore observed doubling in 1965 and revised the pace in 1975; the equipment maker states EUV gives the highest resolution2036Reported
Memorya high-bandwidth memory standard was published in 2025; details come from search summaries32Reported
Minor mineralsgallium and germanium are used in chips and concentrated in primary production; primary figures not bound252640Inferred

Couplings

  • TRD → INF tools and controls
  • MIN → INF materials
  • FIN → INF equipment spend

Evidence to bind in 2027

  • packaging and memory capacity by country
  • gallium and germanium figures from the primary source

Related editions

  • GLB Global Systems
  • GS-02 Energy
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-04 Critical Minerals and Strategic Materials
  • XT-01 Artificial Intelligence and Agentic Systems
  • XT-07 HPC and Advanced Computing

8.4Economy, investment and workforce

Sales and public programmes are large and well documented. Outlays and workforce numbers are the thin parts of the evidence.

25.6%

growth of global chip sales, 20258

50USD billion

CHIPS and Science Act programmes44

33EUR billion

public and private investment across 19 State aid decisions, EU12

Table 8.4State at baseline
ComponentStateEvidenceStatus
SalesUSD 791.7 billion in 2025; about USD 1 trillion projected for 2026 by SIA8Reported
US programmesUSD 39 billion for manufacturing and USD 11 billion for research; award outlays not bound at the close4411Reported
EU programmesmore than EUR 33 billion across 19 State aid decisions; second act proposed June 202612Reported
Japan and IndiaRapidus round of JPY 267.6 billion in 2026; India mission listed214243Reported

Couplings

  • FIN → INF plants and tools
  • GOV → FIN subsidy flows
  • HLT → INF workforce

Evidence to bind in 2027

  • subsidy outlays against awards
  • workforce size and skills gaps

Related editions

  • GLB Global Systems
  • GS-02 Energy
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-04 Critical Minerals and Strategic Materials
  • XT-01 Artificial Intelligence and Agentic Systems
  • XT-07 HPC and Advanced Computing

8.5Security, export controls and governance watch

Export controls and subsidies now shape the supply chain. Rules change at short notice, so the watch follows the rule texts.

2023year

EU Chips Act entered into force on 21 September12

2026year

US licence guidance for D:5 entities, May13

2026year

EU second Chips Act proposed, June12

Table 8.5State at baseline
ComponentStateEvidenceStatus
US controlslicence required for advanced computing items to entities headquartered in Country Group D:5; Section 232 investigation listed13Reported
Diffusion ruleframework published in January 2025 and rescinded in May 2025, per law-firm summaries3031Reported
Allied controlsNetherlands and Japan control lithography equipment, cited from memory41Inferred
EU governancethree pillars and a European Semiconductor Board; second act proposed1233Reported

Couplings

  • TRD → INF controls
  • GOV → FIN subsidy flows
  • INF → DAT hardware supply

Evidence to bind in 2027

  • text of the second Chips Act
  • licence statistics

Related editions

  • GLB Global Systems
  • GS-02 Energy
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-04 Critical Minerals and Strategic Materials
  • XT-01 Artificial Intelligence and Agentic Systems
  • XT-07 HPC and Advanced Computing

Notes

Numbers are the edition’s reference numbers, so a note reads the same in every chapter. The full list, with every source and its licence, is in Annex C. Annex C, references

  1. 8Semiconductor Industry Association (ed.), Global Annual Semiconductor Sales Increase 25.6% to $791.7 Billion in 2025 (release; WSTS data; logic USD 301.9 billion; memory USD 223.1 billion; regional growth; about USD 1 trillion projected for 2026). Semiconductor Industry Association, Washington. Observation year 2025. Accessed 2026-11-03.back
  2. 1Pilz, K.F., Sanders, J., Rahman, R. and Heim, L., Trends in AI Supercomputers, arXiv:2504.16026, submitted 22 April 2025 (abstract page: 500 systems from 2019 to 2025; performance doubling about every nine months; cost and power doubling about every year; one March 2025 system with about 200,000 chips, USD 7 billion and 300 MW; about 75% of performance in the United States). arXiv, Ithaca. Observation year 2025. Accessed 2026-11-03.back
  3. 22Focus Taiwan, Central News Agency (ed.), report of 13 March 2026 on the largest foundry reaching almost 70% of the global foundry market in 2025 (headline and lead only; the rest is behind a paywall); press report, weak evidence. Central News Agency, Taipei. Observation year 2025. Accessed 2026-11-03.back
  4. 27UNVERIFIED, not opened: TrendForce (ed.), 2025 foundry ranking (largest foundry sales about USD 122.5 billion and a share of about 69.9%), taken from press coverage in search results. TrendForce, Taipei. Observation year 2025. Accessed 2026-11-03.back
  5. 28UNVERIFIED, not opened: TSMC (ed.), fourth-quarter 2025 results (about 74% of 2025 wafer revenue from 7 nanometre and smaller nodes against 69% in 2024), taken from press coverage in search results; sources differ on the quarterly share. Taiwan Semiconductor Manufacturing Company, Hsinchu. Observation year 2025. Accessed 2026-11-03.back
  6. 19Nvidia (ed.), Blackwell architecture product page (208 billion transistors per GPU; custom TSMC 4NP process; performance multiples are vendor claims and weak evidence). Nvidia, Santa Clara. Observation year 2026. Accessed 2026-11-03.back
  7. 15US Department of Energy (ed.), DOE Releases New Report Evaluating Increase in Electricity Demand from Data Centers, 20 December 2024 (176 TWh in 2023, about 4.4%; 325 to 580 TWh, about 6.7% to 12%, in 2028). US Department of Energy, Washington. Observation year 2023. Accessed 2026-11-03.back
  8. 3Sevilla, J. and others, Can AI scaling continue through 2030?, Epoch AI, 20 August 2024 (first 100,000 characters read: about 4 times a year; 1 to 5 GW campuses; about 2e29 FLOP feasible by 2030; power binds first). Epoch AI, San Francisco. Observation year 2024. Accessed 2026-11-03.back
  9. 16Shehabi, A. and others, 2024 United States Data Center Energy Usage Report, Lawrence Berkeley National Laboratory, December 2024 (publication page abstract only; no figures on the page; the report PDF was not read). Lawrence Berkeley National Laboratory, Berkeley. Observation year 2023. Accessed 2026-11-03.back
  10. 24UNVERIFIED, not opened: IEA (ed.), Energy and AI, April 2025 (about 415 TWh of global data centre electricity in 2024, about 1.5% of the total; about 945 TWh in 2030 in the base case; range of 700 to 1,700 TWh in 2035), taken from search-result summaries; the IEA pages returned an access error. International Energy Agency, Paris. Observation year 2024. Accessed 2026-11-03.back
  11. 5Stanford Institute for Human-Centered AI (ed.), The 2025 AI Index Report, key takeaways page (training compute doubling about every five months; hardware cost down about 30% a year; energy efficiency up about 40% a year; chips detail not given on the page). Stanford University, Stanford. Observation year 2025. Accessed 2026-11-03.back
  12. 7Patterson, D. and others, Carbon Emissions and Large Neural Network Training, arXiv:2104.10350, April 2021 (abstract page: sparse models under one tenth of the energy; location effect 5 to 10 times; choice of model, datacentre and processor 100 to 1000 times). arXiv, Ithaca. Observation year 2021. Accessed 2026-11-03.back
  13. 23AZFamily (ed.), TSMC Arizona expansion could make it Phoenix’s largest water customer, 22 July 2026 (total planned investment USD 265 billion; about 5,300 acre-feet a year for the first fab; 65% reclaimed; goal 90%); local news reporting company figures, weak evidence. Gray Media, Phoenix. Observation year 2026. Accessed 2026-11-03.back
  14. 9Evertiq (ed.), Semiconductor equipment billings reached $135B in 2025, 9 April 2026, a trade report of a SEMI release (USD 135.06 billion in 2025 against USD 117.14 billion in 2024; regional table); the SEMI page itself returned an access error, so this is a secondary report and weak evidence. Evertiq, Munich. Observation year 2025. Accessed 2026-11-03.back
  15. 20ASML (ed.), Moore’s law explainer page (Moore observation of 1965 and revision of 1975; statement that EUV gives the highest resolution; no High-NA content on the page). ASML, Veldhoven. Observation year 2026. Accessed 2026-11-03.back
  16. 36UNVERIFIED, not opened: Moore, G.E., Cramming more components onto integrated circuits, Electronics 38(8), 1965, cited from memory. Observation year 1965. Accessed 2026-11-03.back
  17. 32UNVERIFIED, not opened: JEDEC (ed.), JESD270-4 HBM4 standard, April 2025 (about 2 TB/s per stack; 32 channels; up to 64 GB per stack), taken from search-result summaries; the JEDEC page returned an access error. JEDEC Solid State Technology Association, Arlington. Observation year 2025. Accessed 2026-11-03.back
  18. 25UNVERIFIED, not opened: USGS (ed.), Mineral Commodity Summaries 2026, gallium chapter (reported in summaries as about 99% of primary low-purity gallium produced in China in 2025), taken from search-result summaries; the page returned an access error and no figure is used in the findings. US Geological Survey, Reston. Observation year 2025. Accessed 2026-11-03.back
  19. 26UNVERIFIED, not opened: USGS (ed.), Mineral Commodity Summaries 2026, germanium chapter, the page returned an access error; summaries differ on China shares and no figure is used. US Geological Survey, Reston. Observation year 2025. Accessed 2026-11-03.back
  20. 40UNVERIFIED, not opened: IEA (ed.), Global Critical Minerals Outlook 2026, cited from the XT-02 notes of this series, not read for this edition; no figure is used. International Energy Agency, Paris. Observation year 2025. Accessed 2026-11-03.back
  21. 44United States Congress, CHIPS and Science Act, Public Law 117-167, enacted 9 August 2022 (text of section 102 on Congress.gov, first 100,000 characters read: the funding lines for sections 9902 and 9906 of Public Law 116-283 by fiscal year 2022 to 2026 sum to USD 39 billion for manufacturing incentives and USD 11 billion for research, USD 50 billion in all; the totals are sums of the listed amounts, not stated in the text). Observation year 2022. Accessed 2026-11-03.back
  22. 12European Commission (ed.), European Chips Act policy page (entered into force 21 September 2023; three pillars; more than EUR 33 billion across 19 State aid decisions; second Chips Act proposed June 2026). Directorate-General for Communications Networks, Content and Technology, Brussels. Observation year 2026. Accessed 2026-11-03.back
  23. 11NIST (ed.), CHIPS research and development programmes page (National Semiconductor Technology Center, National Advanced Packaging Manufacturing Program, Manufacturing USA institute; undated; no programme amounts). National Institute of Standards and Technology, Gaithersburg. Observation year 2026. Accessed 2026-11-03.back
  24. 21The Register (ed.), Japan’s Rapidus lands $1.7B to chase 2nm chip production by 2027, 27 February 2026 (JPY 267.6 billion round; JPY 100 billion from a METI agency; JPY 167.6 billion from 32 companies); trade press, weak evidence. Situation Publishing, London. Observation year 2026. Accessed 2026-11-03.back
  25. 42UNVERIFIED, not opened: Government of India, Ministry of Electronics and Information Technology, India Semiconductor Mission, the programme site returned an access error; cited from memory without figures. Observation year 2026. Accessed 2026-11-03.back
  26. 43UNVERIFIED, not opened: METI and press coverage of the April 2026 addition of JPY 631.5 billion to Rapidus support, bringing research and development support to about JPY 2.354 trillion, taken from search-result summaries; totals differ by source. Observation year 2026. Accessed 2026-11-03.back
  27. 13US Department of Commerce, Bureau of Industry and Security (ed.), home page and news items (May 2026 guidance on licences for advanced computing items to Country Group D:5 entities; 7 April 2026 extension of the authorised IC designer timeline to 31 December 2026; Section 232 investigation of semiconductor imports listed). BIS, Washington. Observation year 2026. Accessed 2026-11-03.back
  28. 30UNVERIFIED, not opened: US Department of Commerce, Framework for Artificial Intelligence Diffusion, interim final rule, 90 Federal Register 4544, January 2025, cited from search summaries; the Federal Register page redirected. Federal Register, Washington. Observation year 2025. Accessed 2026-11-03.back
  29. 31UNVERIFIED, not opened: law-firm client alerts on the rescission of the AI diffusion rule and related guidance, 12 and 13 May 2025, taken from search-result summaries; a formal notice date was not confirmed. Observation year 2025. Accessed 2026-11-03.back
  30. 41UNVERIFIED, not opened: Government of the Netherlands and Government of Japan, export-control rules on advanced semiconductor manufacturing equipment, 2023, cited from memory; no figure is used. Observation year 2023. Accessed 2026-11-03.back
  31. 33UNVERIFIED, not opened: European Union, Regulation (EU) 2023/1781 of 13 September 2023 establishing a framework of measures for strengthening Europe’s semiconductor ecosystem (Chips Act); the EUR-Lex fetch returned no text, cited from memory. Publications Office of the European Union, Luxembourg. Observation year 2023. Accessed 2026-11-03.back

Cite this chapter

Valadbaygi, S. (Ed.). (2026). Chapter 8: Systems in depth. In Exponential Technology Report 2026: Advanced Semiconductors and AI Compute (Baseline Edition 2026, Report No. NR-XTECH-SEMICONDUCTORS-GLOBAL-2026-BASELINE) [Draft under review]. The Global Centre for Risk and Innovation (GCRI).

Every citation form of the whole report, BibTeX and RIS included, is on the edition home. Cite this report

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