The global chip shortage will continue to cause pain for manufacturers for at least two more years, Intel CEO Pat Gelsinger has said.
In an interview with CNBC’s TechCheck, Gelsinger said that he foresees the shortage in supply coming to ease in 2024.
The electronics industry started experiencing an acute shortage in semiconductors at the beginning of the Covid-19 pandemic, mainly attributed to a disruption in factories.
Semiconductors are the backbone of the automobile and electronics manufacturing industries and the prolonged shortage has been cited as a reason for high inflation in various nations including the United States. Several vehicle manufacturers have reported inability to cope with customer demand due to production delays caused by chip shortages.
The demand has been growing for years, as the digital space expands and processing chips find their way into everything from smartphones to automobiles to washing machines.
Gelsinger says that part of what’s fueling the global chip shortage is inadequate manufacturing tools.
“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,”
Intel is the leading global chipmaker and has had to readjust its approach to chip manufacturing by diversifying investments geographically. The company is spending more resources on plants within the U.S and Europe. Currently, Asia has the highest concentration of chip manufacturing firms.
“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,”
The U.S government has also stepped in to raise funds to support chipmakers in the country.