Six months later predicting that the global chip shortage would last until at least 2023Intel CEO Pat Gelsinger is now suggesting it could be 2024 before we’re completely out of the woods.
“[W]We think the overall semiconductor shortage will now shift to 2024, from our previous estimates in 2023, only because the shortage has now affected equipment and some of those factory ramps will be more challenged.” he told CNBC on Friday.
But while that sounds a bit doom and gloomy, you should know that “chip shortage” it is an involved and evolving situation that doesn’t affect all types of chips at all times. Some industries and some types of parts have been hit harder than others as things go. In fact, Intel’s own chips work quite well. “For the first time in years, Intel factories and our substrate supply are close to meeting our customers’ demand,” Gelsinger said yesterday on the company’s website. First Quarter 2022 Earnings Call.
When Gelsinger says the shortage will last until 2024, he is referring in part to the industry’s ability to meet demand for new products being built on new lines, not just existing ones. “We expect the industry to continue to face challenges through at least 2024 in areas such as foundry capacity and the availability of tools like IDM,” he said on yesterday’s call. Digitimes recently reported that chip-making equipment suppliers now have more than 18 months back up, compared to six months last year.
Put another way, CPUs, GPUs, and game consoles were some of the higher-profile items affected by the shortage, but it seems that supply and demand are already beginning to equalize there. But network chip vendors are still in the midst of a major chip shortage: Gelsinger named ethernet a particularly tough “ecosystem supply constraint” that has slowed PC shipments.
But that’s not why Intel’s Client Computing Group (which handles consumer processors, among other things) is down 13 percent this quarter. Intel attributed this to a “decline in Apple’s CPU and modem business” and “OEM inventory burn” as well as “lower demand for education and consumption,” aka schools are buying fewer Chromebooks and apple has almost made a complete transition from Intel to its own M1 processorthat left Intel laptops in the dust.
Intel is one of the companies that invests heavily in new production lines, by the way, building new factories in ohio, ArizonaY Germany, though the current timeline suggests that none of those new factories will come online until the chip shortage ends. The first new factories in Chandler, Arizona, are not scheduled to open until 2024.