Semiconductor cycle and chip shortage: Nomura sees an intensifying chip shortage extending the semiconductor boom into Q4 2026

Overview

This macro semiconductor-cycle update argues that a deepening mismatch between demand and supply is extending the chip boom. Nomura uses its Chip Shortage Index to conclude that scarcity, pricing strength and hardware investment momentum should continue to support Korea and Taiwan in the coming months.

Core views

Nomura's Chip Shortage Index (CSI) signalled a renewed intensification of semiconductor scarcity in August and September. The index rose to a record 103.9 in September after moderating for several months; readings above 100 indicate a shortage, while changes in the index indicate whether the imbalance is intensifying or easing. Nomura expects a further increase in October because demand remains stronger than deliverable supply. Its CSI clock stayed in the boom phase for a 27th consecutive month, the longest such run since 2012 and longer than the 26-month boom during the COVID-19 pandemic. The report therefore concludes that the chip cycle has not reached an inflection point and should remain strong into Q4 2026. On supply, some survey measures improved but not enough to resolve tightness quickly. Korea's electronics production BSI rebounded to 103 in September from 100 in August, while Taiwan's electronics production PMI remained expansionary at 63.7 in August. However, hard production data were weaker: Korean chip-production growth slowed from 13.3% year on year in April to 0.8% in July, and Korea's chip inventory-to-shipment ratio rose to 0.56. Nomura argues that meaningful supply relief requires capacity investment, construction and a successful yield ramp, so even an improvement at the margin is unlikely to reverse the constraint rapidly. Demand remains exceptionally strong across the report's dashboard. Big-tech capex-growth expectations reached 132.4% year on year in September; Korea's electronics new-orders BSI rose to 108; Taiwan's electronics new-orders PMI was 67.5 in August; and Taiwan ICT export orders increased 100.5% year on year. Nomura interprets this combination as evidence that the hardware-investment upcycle remains robust and that new supply is still being absorbed. Although the token-expenditure index fell from 1.9 in May to 1.0 in September, the institution cautions that this need not mean weaker AI demand: lower inference costs and efficiency gains can encourage more usage even as unit costs decline. The GPU rental index remaining around 2.7 since June, rising capex expectations and firm new orders offer little evidence that lower token expenditure has reduced physical AI-infrastructure demand. Prices reinforce the scarcity signal. Korean DRAM and NAND export prices rose 249.2% and 246.4% year on year, respectively, in August, while DDR5 spot prices remained more than double their Q4 2025 levels. Together with the rising CSI, these developments suggest that added supply is being absorbed faster than it can relieve scarcity. Korea's chip exports in the first 20 days of September rose 259.4% year on year, accelerating from 198.8% in August, which Nomura views as confirmation that the upcycle is still gaining momentum despite AI-capex-slowdown concerns. Nomura also presents the CSI as a leading macro indicator. Its empirical analysis finds that the CSI leads Korean chip export prices by around two months and has a comparable lead over export growth and machinery investment in both Korea and Taiwan. The proposed transmission is that tighter chip availability lifts semiconductor prices and export revenue, while persistent shortages and strong demand prompt capacity expansion and machinery investment. On this basis, Nomura argues that the semiconductor cycle is increasingly a source of macro momentum for Korea and Taiwan, with the CSI providing an early read on how scarcity may feed into their broader business cycles.

Analysis framework

Nomura tracks monthly demand-supply conditions using its Chip Shortage Index, then combines the index with a cycle clock, supply and inventory indicators, demand and capex measures, pricing data, and export evidence. It also tests the CSI's historical lead over semiconductor prices, exports and machinery investment in Korea and Taiwan.

Methodology notes

• Industry AnalysisSupply-demand framework

  Monthly semiconductor demand-supply balance analysis

  The CSI measures whether chip demand exceeds supply; a reading above 100 signals shortage. Nomura uses changes in the measure alongside supply, demand and price indicators to judge whether scarcity is worsening or easing.

• Cycle and Business ConditionsBusiness-Cycle Inflection Analysis

  Nomura CSI clock

  Nomura applies an HP filter to extract the CSI trend and classifies the cycle using the trend's level of supply tightness and its month-on-month momentum, identifying four regimes including the boom phase.

• Other

  Empirical lead-lag analysis

  The report compares the CSI with later movements in Korean chip export prices, exports and machinery investment in Korea and Taiwan, finding an approximately two-month lead.

Key data

• Nomura Chip Shortage Index103.9 in September 2026Record high; readings above 100 indicate a chip shortage.
• CSI boom phase27 consecutive monthsLongest boom since 2012, exceeding the 26-month COVID-19-pandemic boom.
• Korea chip exports259.4% y-o-yFirst 20 days of September, up from 198.8% in August.
• Big-tech capex-growth expectations132.4% y-o-ySeptember reading based on 12-month forward Bloomberg consensus estimates.
• Taiwan ICT export orders100.5% y-o-yAugust reading.
• Korean DRAM and NAND export prices249.2% y-o-y and 246.4% y-o-yAugust increases, respectively.
• CSI leadAround two monthsLead over chip prices, exports and machinery investment in Korea and Taiwan.

Impact & implications

Nomura believes persistent semiconductor scarcity should continue to lift chip prices, export revenue and capacity-related machinery investment, supporting macro growth momentum in Korea and Taiwan. The report views the CSI as an early indicator of these effects over roughly the following two months.

What to watch

• Whether the Nomura CSI rises further in October, as the institution expects.
• Whether supply additions and yield ramps accelerate enough to ease the shortage.
• Big-tech capex expectations, GPU rental conditions and electronics new-order indicators.
• Korean and Taiwanese chip-price, export and machinery-investment data, given the CSI's estimated two-month lead.