The global semiconductor crunch fueling higher compute and Personal Computer (PC) prices across the artificial intelligence (AI) boom is poised to intensify further over the next few years, according to Dell Technologies CEO Michael Dell. Speaking to investors at the Goldman Sachs Communacopia + Technology Conference recently, founder of PC giant Dell warned that industry-wide supply bottlenecks will “probably” be worse in 2027 than in 2026, CRN reported.Dell explained to Goldman Sachs analyst Katherine Murphy that the rapid leap from basic Large Language Models (LLMs) to complex reasoning engines and autonomous agents has vastly outstripped manufacturing lead times. According to him, since this progress unfolded far faster than the years required to construct a new semiconductor fabrication plant, a deep structural shortage has emerged. While rising component and memory costs are systematically passed along to buyers, Dell noted that customers ultimately move past initial pricing pushback because an inability to source hardware poses an existential threat to running their operations. “Yes, costs are going up. Yes, we price all that through. But you know customers sort of go through five stages of grief (saying initially), тАШOK the price went up I donтАЩt really like that.тАЩ You know what is worse than that? They donтАЩt have availability. Because they canтАЩt run their business and that is a disaster.тАЭOnce customers come to grips with the higher costs of infrastructure, Dell said they ask, тАЬAre you going to be able to supply us with what we need over the next year or two years? So that is what we work on with our customers. We watch closely for any signs of double ordering or things that are not being utilized and we donтАЩt see that.тАЭ
Dell’s strategy to deal with supply chain shortages
To navigate the squeeze, the tech giant is actively monitoring its order pipeline to verify that equipment is genuinely deployed rather than stockpiled. Dell emphasized to investors that his company commands the best demand-signal integrity in the market due to its direct engagement with end users. Dell told Goldman Sachs investors, тАЬWe are more directly working with customers of all types and we see what the actual demand is from the end customers.тАЭ He noted that historically tighter supply environments have worked to DellтАЩs advantage, citing longstanding supplier partnerships and a vast product catalog that enables the firm to dynamically allocate components where customer appetite is strongest.
‘CEOs and managers are still figuring out the AI advantage’
Beyond immediate logistics, semiconductor manufacturers view the company as a dependable counterparty capable of absorbing high-capital-expenditure fab output across long horizons stretching into the late 2030s. Dell highlighted that enterprise buyers equally rely on the hardware maker to honor its delivery commitments during turbulent cycles. At the same time, enterprise appetite shows little sign of dampening, with executive leadership increasingly viewing AI deployment not as a traditional IT expense, but as a critical driver of efficiency, innovation, and direct corporate value creation. He said, тАЬIf you had 200 people doing something now you can have 50 people doing the same thing with $10 million of AI spend and it costs half as much and it actually works better. So whatтАЩs happening is the CEOs and the business line executives are all figuring out they need AI to be more competitive, to be more innovative, to be faster. So the conversation is sort of leaving the traditional budget discussion because this is actually how you create value inside companies.”
