Six months after predicting the global chip shortage would last until at least 2023, Intel CEO Pat Gelsinger is now suggesting it could be 2024 earlier than we’re totally out of the woods.
“[W]e 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,” he told CNBC on Friday.
But whereas that sounds slightly doom-y and gloom-y, it is best to know that the “chip shortage” is an involved, evolving situation that doesn’t have an effect on each form of chip at each time. Some industries and a few sorts of components have been worse hit than others as issues go on. In truth, Intel’s personal chips are doing pretty effectively. “For the first time in years, Intel fabs and our substrate supply are close to meeting our customers’ demand,” Gelsinger stated yesterday on the firm’s Q1 2022 earnings call.
When Gelsinger says that the shortage will stretch into 2024, he’s partly speaking about the business’s capability to fulfill demand for brand spanking new merchandise being constructed on new strains, not simply present ones. “We expect the industry will continue to see challenges until at least 2024 in areas like foundry capacity and tool availability as an IDM,” he stated on yesterday’s name. Digitimes recently reported that chipmaking tools suppliers are now backed up greater than 18 months, up from six months simply final 12 months.
Put one other approach, CPUs, GPUs, and sport consoles have been a few of the highest-profile gadgets hit by shortages, however it seems like supply and demand are already beginning to equalize there. But networking chip distributors are nonetheless in the center of a major chip shortage: Gelsinger namedropped ethernet as a very tough “ecosystem supply constraint” that has slowed down PC shipments.
But that’s not why Intel’s Client Computing Group (which handles shopper processors, amongst different issues) is down 13 % this quarter. Intel attributed that to a “ramp-down of the Apple CPU and modem business” and “OEM inventory burn” in addition to “lower consumer and education demand” — aka schools are buying fewer Chromebooks and Apple has all but fully transitioned away from Intel to its own M1 processor, which left Intel laptops in the mud.
Intel is one in every of the corporations investing closely in new manufacturing strains, by the approach, building new fabs in Ohio, Arizona, and Germany, although the present timeline suggests none of these new fabs will go browsing till the chip shortage is over. The first new fabs in Chandler, Arizona, aren’t scheduled to open till 2024.