Intel CEO: The Chip Shortage Will Last Until 2024

This site may earn affiliate commissions from the links on this page. Terms of use.

Back in December of 2021, Intel CEO Pat Gelsinger weighed in on when the chip shortage would end. He stated at the time he thought the situation would improve in 2023. Mr. Gelsinger was speaking in Malaysia where he was announcing a $7.1B investment in a new packaging facility. Back in those simpler times, he said it was just a matter of supply and demand. Therefore, as more chip-making capacity comes online, these two market forces would begin to align. Now that we’re deep into 2022, Gelsinger has reassessed the situation. As it turns out, a full recovery won’t be happening soon due to an unforeseen development: now there’s not enough machines available to make silicon wafers.

Intel’s CEO made his revised comments to CNBC this week. His new comments move the goalposts for the end of the chip shortage back by at least a year. Speaking about the current shortage of parts and tools for lithography machines, Gelsinger said, “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.” His mention of “factory ramps” go directly to the heart of the issue. Although Intel has been investing heavily in boosting its production, it won’t do much good without the machines it needs to make chips.

Intel CEO Pat Gelsinger holds an SRAM wafer built on its bleeding edge 18A process.

Gelisinger’s comments follow recent announcements of massive expansion efforts by the company. It’s unveiled plans for new megafabs in both Ohio and Germany. It also recently expanded its Oregon campus as well. Intel’s CEO says this is part of the company’s strategy to build some redundancy and diversity into its production lines. One of the major causes of the global chip shortage is that 80 percent of the world’s silicon wafer production is based in Asia. Intel hopes to be able to provide an alternative source for advanced wafer technology when all its new fabs come online. Gelsinger expects that to happen around 2025 or so. Obtaining geographic diversity could be a crucial component in determining the success of its Intel Foundry Services business. Along with, you know, having advanced nodes to offer to third parties.

Also, the biggest manufacturer of silicon wafer machine is ASML, which has previously said it can’t produce enough machines. Even worse, it said it will be years before it’s able to catch up with demand. As we reported previously, ASML’s chief executive Peter Wennink said he’s been in direct contact with Gelsinger about the issue. Wennick’s operation is particularly fragile, with over 700 companies in its supply chain.

Regarding the machine shortage, Gelsinger said Intel will certainly be affected. However, he says the company is maneuvering itself into a position to mitigate these issues. “We’ve really invested in those equipment relationships, but that will be tempering the build-out of capacity for us and everybody else, but we believe we’re positioned better than the rest of the industry,” Gelsinger said.

Now Read:

Comments are closed.