In the early 2000s, the world of fine spirits broke. Demand for aged whiskey and fine wine exploded with new wealth, new buyers and a global culture shift. Everyone could see it. But supply couldn't respond, because supply had been "decided" years earlier, when the barrels were filled. No amount of money could speed up a calendar. The result was violent. Prices didn't just rise; they decoupled from reality. 

Today, we are walking into the exact same trap. But this time, it isn't about luxury consumables. It is about the fundamental substrate of the modern economy.

It is about silicon.

We are witnessing a silicon shock. It is happening now. It is happening at a scale that makes the whiskey crisis look like a rounding error. And unlike the 1970s oil shocks, which were driven by supply embargoes, this crisis is driven by a ferocious, unyielding explosion in demand.

The world has suddenly realized it needs to convert sand into "intelligence" at a rate that defies physics. The demand for compute, specifically, the high-performance silicon required to process AI tokens, has not increased by 50% or 100%. Depending on how you measure the "token," the fundamental unit of AI thought, demand has exploded by anywhere from 40x to 100x in the last 18 months.

One credible synthesis puts monthly tokens at roughly ~40 trillion (2024) to ~4 quadrillion (late-2025) or about ~100×. Even if you cut the headline and use a more conservative blend, you still land in the ~40-60× (annualized blending) range, with peak bursts higher.

The supply chain cannot hold. It is breaking. The wafers, the memory, the advanced packaging that transforms raw silicon into AI accelerators cannot respond to demand shocks measured in decades-per-quarter. Building a new fab takes 3-5 years. Expanding high-bandwidth memory production takes 2-3 years. Adding advanced packaging capacity takes 18-24 months. After exhausting spare capacity and drawing down inventories to crisis levels, the world has reached a point where the bottlenecks are multiplying. 

The narrative that this is a "financial bubble" ignores a far bigger reality. Even if all the suspect initiatives or accounting trickeries are reversed instantaneously, the demand explosion has little to do with their activities. 

Extremely simplistically, what we show below is that if tokens rose ~100× and efficiency improved ~20×, you still get ~5× net silicon demand at the most advanced logic and memory levels. And, the supply base at the critical bottleneck points grew roughly ~1.5× to 2×. The realities becoming obvious daily are that the advanced packaging lines at TSMC and the memory production facilities of the three makers are already fully booked for 2026, and with no respite in parabolic demand, they are looking to pay higher prices to cut the queue.