---
title: Bank Card Chips Could Get Scarcer as Foundries Shift Capacity to AI
description: The card industry's trade body warns AI is pulling chip factories away from the mature nodes card chips use, and asks banks to forecast and order earlier.
author: Darie Nani (Editor-in-Chief)
date: 2026-10-13T08:41:59.767Z
updated: 2026-10-13T08:41:59.776Z
canonical: https://www.sovereignmagazine.com/article/bank-card-chip-shortage-ai-foundries-spa
image: https://cdn.nanimediahouse.com/pexels-scientist-in-protective-gear-walking-in-a-high-tech-cleanroo-5118462.jpg
categories: Supply Chains
content_type: News
region: Global
publication: Sovereign Magazine
schema_type: Article
---

The chips inside bank cards could become harder to source as semiconductor foundries move production towards artificial intelligence, the Smart Payment Association, the trade body for the cards and mobile payment industry, warned in a [position paper](https://www.smartpaymentassociation.com/publications/how-ai-driven-semiconductor-demand-and-geopolitical-volatility-combined-significantly-impact-the-payment-card-industry-an-spa-position-paper/) released on 6 October.

Payment card chips are made on mature manufacturing processes of 28 nanometres and above, older technology than the advanced nodes used for AI processors. The SPA says AI is unlikely to change how card chips are designed, but foundries are favouring AI-enabled consumer products, data centres and other high-value markets, investing in advanced nodes and 12-inch wafer production "while reducing focus on older 8-inch capacity". The association cites the European Commission's impact assessment for the proposed [Chips Act 2.0](https://www.sovereignmagazine.com/article/european-semiconductor-companies-chips-act), which it summarises as finding "supply chain vulnerabilities emerging in mature technologies below approximately 40nm".

> "The AI boom is not just a temporary disruption. It will increase supply-chain demand for the mature-node capacity on which the chips for payment cards depend."
> — Smart Payment Association position paper

Card manufacturers are already acting individually to avoid a repeat of the chip shortage that followed the Covid-19 pandemic, according to the SPA. As foundries report capacity limits, manufacturers increasingly have to qualify and switch to alternative foundries, which the SPA says "demands significant time, resources, and technical effort". The association says chip availability "may become increasingly constrained", stopping short of saying a shortage has begun.

## TSMC Has Reportedly Cut 28nm Output by More Than a Quarter This Year

Monthly wafer starts at Fab 15A, TSMC's main 28nm site, have fallen by more than 25% since the start of 2026, [TrendForce reported in June](https://www.trendforce.com/news/2026/06/22/news-tsmc-reportedly-cuts-28nm-output-by-over-25-since-early-2026-as-advanced-node-push-accelerates/), citing Taiwan's Commercial Times and Economic Daily News. Sources quoted by Commercial Times put TSMC's monthly 28nm starts at about 150,000 wafers in June, down from about 200,000 earlier in the year. Fab 15A is reportedly being converted to make 4nm chips, and TSMC is reportedly steering 28nm customers towards its 12nm process, with some customers turning to UMC and Vanguard for spillover capacity.

TSMC has also told customers that its 6-inch Fab 2 and 8-inch Fab 5 will shut by the end of 2027, and Samsung plans to close its Giheung S7 8-inch fab in the second half of 2026, [TrendForce reported in January](https://www.trendforce.com/news/2026/01/15/news-global-8-inch-wafer-market-tightens-samsung-giheung-s7-tsmc-closures-put-china-fabs-in-spotlight/), citing Liberty Times and The Elec. TrendForce estimates global 8-inch wafer output will fall about 2.4% this year, and says some foundries have warned customers of price rises of 5% to 20%.

In its own research, [TrendForce says](https://www.trendforce.com/presscenter/news/20260630-13127.html) demand for AI servers, general-purpose servers and edge AI devices is leading foundries to give a growing share of wafer capacity to AI-related products, which "has significantly altered the supply-and-demand balance for mature process nodes". The research firm expects prices for 12-inch mature-node foundry services to keep rising into 2027. Memory makers made a similar shift last year, when they moved towards [high-bandwidth memory for AI](https://www.sovereignmagazine.com/article/ai-s-memory-crisis-why-your-next-smartphone-might-cost-more-and-do-less) and DRAM for phones and laptops became scarcer.

## A US Card Maker Says Chip Lead Times Have Stretched to Five Months

ABCorp, a US card manufacturer, [wrote in April](https://abcorp.com/card-resources/card-program-manage-emv-chip-shortage-2026/) that wafer fabrication lead times for secure microcontroller chips had stretched from about 12 weeks to around 16 weeks at leading suppliers. With about four weeks for module packaging and one to two weeks for shipping, ABCorp puts total delivery at 20 to 22 weeks, roughly five months. The company also reported "a pricing increase of approximately 10% across certain secure chip categories, affecting both existing backlog and new orders", and named testing, assembly and packaging as a further bottleneck.

## Card Chip Inventories Had Recovered From the Last Shortage by 2025

The SPA first warned in [June 2021](https://www.smartpaymentassociation.com/news-and-events/industry-warns-of-impact-of-chip-shortages-on-payment-card-supply-public-statement-21st-june-2021/) that manufacturers faced "increasing difficulties in obtaining chips needed to produce cards". At the time it put the number of EMV payment cards that must be made and delivered worldwide each year at more than 3 billion, because banks issue cards when accounts open, renew them at expiry and replace them when they are lost or compromised. In June 2022 the association said the shortage would [continue throughout 2023](https://www.smartpaymentassociation.com/news-and-events/spa-warns-on-ongoing-chip-shortages-throughout-2023/), "severely impacting the delivery of payment cards worldwide". Its members shipped more than 2.63 billion smart payment cards and modules in 2021, a figure the SPA said would have been higher if chip allocations had not stopped them fully serving customers.

SPA members and advisory council members shipped 2.47 billion payment cards and chip modules in 2025, with module inventories about 5% above pre-shortage levels, the association [reported in July](https://www.smartpaymentassociation.com/news-and-events/2025-market-monitoring/). In that report it said "the supply pressure that characterized earlier years has eased".

## Card Makers Also Face Tighter Supplies of Gold and PVC

Gold and other precious metals are used in EMV chip components and electrical contacts, and the SPA says pressure on their supply affects chip module packaging and antenna assemblies. It links that pressure to demand for gold as a defensive investment during the wars in Ukraine and the Middle East, and to central banks adding to their reserves. PVC, still the main material in payment cards, is expected to stay in short supply in the near term because petrochemical flows through the Strait of Hormuz have been disrupted, according to the association. On ocean freight, the paper cites "the closure of the Strait of Hormuz with many carriers being rerouted around the Cape of Good Hope", and says air freight capacity is limited on key routes. Companies across the card supply chain are looking at more local manufacturing and alternative transport routes, the SPA says.

## The SPA Wants Banks to Share Forecasts and Place Frame Orders Early

The association is asking card issuers to give manufacturers accurate demand forecasts as early as possible, to flag changes in volume, product mix or rollout timelines promptly, and to place orders and new frame contracts in good time, so manufacturers can secure capacity from chip suppliers. It also recommends regular talks on supply expectations and contingency plans, "including qualifying multiple card platforms based on latest chip technologies". ABCorp advises card programme managers to keep rolling 6 to 12 month demand forecasts, share them with suppliers and lock in allocation commitments before peak demand.

## FAQ

**Q: Is AI causing a chip shortage?**
AI demand is tightening capacity for older chips: average utilisation across the world's top ten foundries' 8-inch fabs recovered to 88% in 2026 and is expected to reach 90% in the second half, according to TrendForce. The research firm says that shows supply of 8-inch mature-node capacity has already become constrained.

**Q: Has the card industry asked governments for help with chip supply before?**
Yes. In June 2021 the SPA said it had started work with payment schemes, central banks and governments to get foundries to give the chips needed for payment cards higher priority, and in 2022 it backed the EU Chips Act, which it said categorises semiconductors for the payment card industry as high priority.

**Q: Who makes payment cards?**
Specialist card manufacturers make them: in 2022 the SPA listed its card-making members as Austria Card, G+D, IDEMIA and Thales. ABCorp, a US card manufacturer, says the same kind of secure microcontroller chip used in payment cards also goes into transit cards and secure credentials.