Their Impact on Türkiye's Traditional IT Sector

Today's information technology (IT) landscape is being shaped by two powerful and simultaneous forces: severe supply constraints for essential hardware (the global chip crisis) and an unprecedented surge in demand triggered by the artificial intelligence (AI) revolution. It is crucial for businesses, particularly in the Turkish IT sector, to strategically understand this dynamic to overcome supply challenges and maintain their competitive advantage. The fundamental challenge lies in the increasing difficulty of sourcing key components for all digital technologies and the mass adoption of AI, the most resource-intensive technology in history, at this very moment. This article explores this complex interplay, beginning with an in-depth analysis of the supply-side crisis in the semiconductor industry.
 

Supply Crisis: Bottlenecks in the Semiconductor Industry

The global chip crisis is not just a logistical issue, but a fundamental crisis stemming from the extreme complexity and high risks of advanced semiconductor manufacturing. This supply-side issue underlies the challenges faced by the entire IT sector. Fundamental manufacturing bottlenecks severely limit the industry's ability to meet demand.

The key manufacturing challenges can be categorized under two main headings:

• Low "Tape-Out" Success Rates: "Tape-out"—the process of sending a finalized design to a foundry to produce a prototype to verify its success—is experiencing a historic decline. This decline is related to factors such as the industry's transition from 28nm to smaller, more complex nodes like 14/7nm^(*) and the integration of security features into designs, particularly in the automotive and industrial sectors.
• Stagnant Production Yield: Considered the "lifeblood" of a foundry, chip yield refers to the percentage of functional chips out of the total number of chips produced. Low productivity rates continue to be a significant bottleneck hindering the sector's growth.

 
In addition to these production challenges, the foundry market is highly concentrated, with only a few major players boasting state-of-the-art production capabilities.
 

Criterion	TSMC (**)	Samsung	Intel
Market Share (2024)	It holds a dominant position with an overwhelming market share of 62%.	It has a market share of 10%.	He is a secondary player trying to close the gap.
Technological Leadership	It gained an advantage by moving early to 3nm mass production in 2022.	It has challenges with process technology and efficiency.	It has set an aggressive timeline for its 20A (2nm) and 18A (1.8nm) processes.
Important Customers	It has high-value customers like Apple, AMD, and Nvidia.	It has difficulty attracting high-end customers compared to TSMC.	It aims to attract more customers to become a more important player.

 
These deep-rooted production challenges and market concentration in the semiconductor industry, combined with a demand boom from the AI sector, are further deepening the current crisis.
 

Demand Explosion: The Hardware Needs of the Artificial Intelligence Revolution

The AI revolution is transforming hardware supply chains by creating an insatiable appetite for computing power. This translates directly into a massive demand for advanced semiconductors, discussed in the previous section. The resources required to train and run advanced AI models are increasing exponentially, placing intense pressure on the hardware supply chain.
 
Data from the Stanford HAI report clearly illustrates the exponential growth in the scale and cost of AI model development:

• Rising Training Costs: The estimated training cost for the original Transformer model in 2017 was approximately $670, while the cost of OpenAI's GPT-4 model has risen to approximately $79 million in 2023. This cost increase reflects the growing demand for resources for cutting-edge AI.
• Massive Compute Requirements: The computing power required to train AlexNet has increased from 470 petaFLOPs to 7,400 petaFLOPs for the original Transformer model. This trend reflects the increasing complexity of the models and data volumes.
• Industry Dominance: In 2024, industry produced 55 significant AI models, while academia produced none. Since 2014, the institutions that have produced the most significant models have been Google (187), Meta (82), and Microsoft (39). This underscores how resource-intensive modern AI development is.

In parallel with these technological advancements, the adoption of AI in the corporate world is also rapidly increasing. According to survey data from Stanford HAI and McKinsey & Company, the percentage of organizations using AI in at least one business function has skyrocketed from 55% in 2023 to 78% in 2024. Productive AI use, in particular, has more than doubled, from 33% in 2023 to 71% in 2024.
 
The ultimate result of these trends is that the widespread integration of resource-intensive AI systems into the business world is creating a relentless and massive demand for high-performance chips, which directly collides with the supply-side bottlenecks discussed earlier.
 

Intersection Point: Reflections on the Traditional IT Industry

The collision of a limited and concentrated chip supply with the explosion of demand for resource-intensive AI is creating tangible and disruptive impacts for the traditional IT sector worldwide. This is creating a pressure environment that requires businesses to rethink even their most basic technology procurement processes.
 
The direct consequences of this supply-demand imbalance for businesses include:

• Extended Lead Times: Lead times for essential equipment like laptops, servers, routers, and networking hardware can stretch for weeks or even months.
• Operational Risks: The consequences of postponing IT purchases include weeks of downtime, lost revenue, project delays, and decreased employee productivity.
• Security Weaknesses: Relying on outdated or faulty devices while waiting for new equipment exposes businesses to serious cybersecurity risks.

The key takeaway for global businesses is that routine technology upgrades and procurement processes now require significant advance planning to mitigate the risk of operational disruptions.
 
These global impacts present similar challenges for businesses in the Turkish market. However, the dynamic and strategic responses of the local market will be decisive in overcoming these challenges.
 

Türkiye Perspective: Challenges and Strategies for the Local IT Sector

As part of the global technology ecosystem, Turkey faces the same supply chain pressures. However, the country's unique characteristics and strategic decisions will shape its response to this global crisis.
 
The key challenges Turkish businesses are likely to face include:

1. Equipment Supply Delays: Like their global counterparts, Turkish companies face long wait times for critical hardware such as employee laptops and network infrastructure, impacting new hires and expansion projects.
2. Loss of Productivity and Revenue: Failure to procure necessary hardware on time can lead to operational disruptions and project delays, directly negatively impacting productivity and revenue.
3. Increased Security Risks: The use of aging equipment due to supply delays exposes Turkish businesses to greater cybersecurity vulnerabilities.

There are proactive strategies Turkish businesses can adopt to mitigate these challenges:

• Anticipate Needs: Companies should anticipate technological needs months in advance. For example, laptops should be ordered at least 30 days before a new employee starts, and critical infrastructure components like servers should be planned 60-90 days in advance.
• Proactive Upgrade: Aging equipment should be replaced before it fails rather than reacting during a crisis.
• Leveraging Managed IT Services (MSP): Partnering with Managed IT Service Providers can potentially minimize wait times by providing access to bulk equipment orders and strong vendor relationships.

A key element supporting this strategic planning is Türkiye's talent pool. According to a Stanford HAI report, Turkey stands out as the country with the highest gender parity among information, technology, and communications (ICT) graduates. This skilled workforce is a critical strategic asset for implementing the complex and proactive planning and technology management strategies required in the current environment.
 

Conclusion and Strategic Overview

The traditional IT sector is caught between fundamental limitations in semiconductor supply and exponential demand generated by the AI boom. This new normal is forcing businesses to fundamentally change their approach to technology procurement. Going forward, specific strategic imperatives emerge to build resilience and competitiveness.

• Proactive Planning is Essential: The "just-in-time" procurement model for critical IT hardware is no longer viable. Long-term forecasting and planning have become essential for operational continuity.
• Collaboration and Innovation Are Essential: Overcoming these challenges requires coordinated efforts across the industry, including leveraging AI-powered tools to improve design and manufacturing.
• A Talent Pool Is a Strategic Advantage: A skilled technical workforce like the one Turkey is developing is vital for managing technological disruptions and turning supply challenges into competitive advantage through superior planning.

 
Oktay Şükür
Management Business Development Consultant
 
^(*) nm (nanometer) value refers to the "scale node" (process node) of semiconductor manufacturing technology. This value indicates the size and density of transistors on a chip.

• 28nm: A “bigger” and relatively easy-to-produce technology that was widely used in the early 2010s.
• 14nm and 7nm: They are much newer, smaller, faster, less energy consuming, but also much more complex and costly technologies to produce.

^(**) Taiwan Semiconductor Manufacturing Company - semiconductor chip manufacturer