India, April 15 -- The semiconductor upcycle is expected to continue for the time being as supply growth lags behind surging demand, according to an analysis by Korea's central bank. The Bank of Korea also projected that Middle East tensions would have limited impact on the chip industry as investment in artificial intelligence continues despite the Iran conflict.

The BOK released these findings in a report titled "Assessment of Global Semiconductor Upcycle Sustainability".

According to the central bank, semiconductor cycles have historically occurred as supply responds to demand fluctuations with a time lag. When chip demand increases, the market enters an expansion phase, then turns downward once supply growth outpaces demand.

The BO...