Intel’s CEO says the chip crunch will last into 2024

Intel CEO Pat Gelsinger told CNBC on Friday that he now expects the semiconductor industry to suffer from a shortage of supplies until 2024.

In an interview on “TechCheck,” Gelsinger said the global chip crunch may drag on due to limited availability of key manufacturing tools, serving as an obstacle to expanding the levels of capacity required to meet increased demand.

“That’s part of the reason we think the overall semiconductor shortage will now slide into 2024, from our previous estimates in 2023, just because the shortage has now hit equipment and some of these factory ramps will be more challenging. , “said Gelsinger.

The CEO’s comments come a day after the California chipmaker offered a second-quarter fiscal forecast that was lighter than Wall Street expected. However, its fiscal earnings and revenue in the first quarter topped analysts’ expectations. Intel shares fell more than 6% on Friday.

Pat Gelsinger, CEO of Intel Corporation, holds a semiconductor chip while testifying at the Senate Trade, Science and Transportation hearing entitled Developing Next Generation Technology for Innovation, in the Russell Senate office building on Wednesday, March 23, 2022.

Tom Williams | CQ-Roll Call, Inc. | Getty Images

The need for more semiconductors has been growing for years as the world becomes more digital and processing chips go into everything from smartphones to cars to washing machines.

However, the Covid pandemic caused an acute shortage as factories were disrupted, while demand for consumer electronics picked up. The shortage has had significant economic consequences and has contributed to the US economy experiencing its hottest inflation since the early 1980s.

Since Gelsinger took over as CEO in February 2021, Intel has announced a number of major investments to diversify chip production geographically. The company spends a lot of money building semiconductor factories, known as manufacturing plants, in the United States and Europe. Most of the world’s chip production capacity is now concentrated in Asia.

“We have really invested in these equipment conditions, but it will dampen capacity building for us and everyone else, but we believe we are better positioned than the rest of the industry,” Gelsinger said.

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