The global chip shortage – which began in 2020 – will continue impacting the electronics industry until 2024, according to Intel CEO Pat Gelsinger. It was previously estimated that the shortages would ease by 2023 or even the second half of 2022.
Global chip shortage will continue impacting the electronics industry for the next two years
The ongoing global chip shortage has been causing constraints in production due to factors such as the global coronavirus pandemic, sanctions against Chinese technology giants, trade wars, and poor anticipation of demand. While there have recently been reports of the shortage easing, Intel’s CEO does not think the situation will improve anytime soon.
In an interview with CNBC, Gelsinger stated that he thinks shortages will “drift” into 2024 due to the constrained availability of key manufacturing tools affecting the ability to expand capacity levels required to meet elevated demand.
“That’s part of the reason that we believe the overall semiconductor shortage will now drift into 2024, from our earlier estimates in 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenged,” the CEO said.
Intel recently revealed its latest quarterly earnings of $18.35 billion in revenue, which was lower than expected. Intel, along with chip makers, has been working to ease the burden on the electronics industry. The company has invested heavily in building facilities in Europe and the United States. “We’ve really invested in those equipment relationships, but that will be tempering the build-out capacity for us and everybody else, but we believe we’re positioned better than the rest of the industry,” Gelsinger said.
Gelsinger’s 2024 prediction is in line with what he said in an interview last year. Back in June 2021, the CEO said that the global chip shortage would take a couple of years to resolve.
However, other companies predict the shortages could ease by 2023. Apple partner Foxconn said in November that it expects the ongoing chip shortage to continue into the second half of 2022. “Given the on-and-off COVID situation globally, we expect the component shortage will extend to at least the second half of next year, which is longer than our previous estimate of till the first half of 2022,” Foxconn Chairman Young Liu said at the time.
The White House in January also stated that the shortages could last until the second half of 2022. In addition to this, the White House has been pushing Congress to approve U.S. subsidies for the manufacturing of semiconductor chips for the last few months.