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Chip shortage will last at least 2 more years, according to Intel CEO

Intel is reworking manufacturing plans at some of its factories to increase production and address this chip shortage in various industries, starting with the automaker, as stated in an interview with CBS News. Intel is likely to need several months for supply tension to begin to ease, in his words, and he also said that it will take us at least a couple of years for supply to catch up with demand in the industry.

Chip supply, demand and shortages according to Intel

Demand for semiconductors skyrocketed in 2020, when consumers began to upgrade their electronics during the pandemic. Coping with this increase has been difficult, because precisely the pandemic caused long delays in supply chains and even the closure of several factories among many other factors; Businesses around the world say they expect supply chain problems due to logistics delays and shortages to continue for much of 2021, but Intel appears to be far more pessimistic (or realistic, depending on how you look at it) about it. .

The global crisis has catapulted semiconductor companies to the spotlight and to the top of many political agendas. Last month, the Biden administration in the US told companies competing with each other for semiconductors that they will have bipartisan support for government funding to address the chip shortage, though how they intend to support it remains to be seen. this industry and to what extent (in other words, how when and in what amount are they going to make financial contributions to defray existing problems).

Gelsinger, CEO of Intel, said that the dominance of the United States in the industry has diminished so much that only 12% of the world-wide manufacture of chips takes place in the country, against 37% of a quarter of century ago. Intel is the only remaining high-end chipmaker in the US, he said in the interview. He also said that «anyone who looks at the supply chain will see that there are problems. This is a large and critical industry and we want more on American soil as it is our long-term future.«.

Supply constraints are hitting a wide range of industries, with tech companies and automakers suffering cutbacks in production and lost revenue as a result (and downsizing, all that is said). The chip shortage has forced the entire auto industry to cut production, and Ford has already announced that the shortage may cause it to make 1.1 million fewer vehicles this year than last year. Jaguar, Volvo and Mitshubishi recently joined the growing list of inactive manufacturers, with Apple already warning that the shortage is affecting sales of iPad and Mac computers.

Chips packaging machine

Meanwhile, Mark Liu (president of TSMC) told CBS News that his company, having heard about the shortage late last year, has tried to “squeeze” as many chips as possible for all industries. In their words, they believe that they are around two months ahead of their production plans, but they have also said that they do not believe that this demand will ease until early 2022.

In short, the entire industry and governments seem to be making an effort to alleviate this shortage of chips that is seriously affecting all companies in the industry worldwide, but the members of the industry do not seem too optimistic and the majority suggest that we will have You have to wait about two years until the supply matches the demand and the situation normalizes, or begins to normalize at least.