Professionals and tech industry veterans have long predicted that the global semiconductor shortage would last for years, but Intel CEO Pat Gelsinger now believes it may last even longer.
The CEO told CNBC’s TechCheck that he expects the shortage to last until 2024 because it has now impacted equipment manufacturing.
This could make it difficult for businesses to obtain key manufacturing tools and meet production targets that may be higher than usual due to rising demand.
“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,” Gelsinger told the outlet.
Lockdowns caused by the pandemic had severely harmed the chip industry just as demand was picking up. It compelled not only technology companies, but also automakers such as GM and Ford, to limit and even suspend production.
Due to component shortages, Apple’s MacBook and iPad shipments were delayed, and smartphone shipments, in general, fell in late 2021. According to CBS News, based on expert estimates, the global chip shortage will cost the United States $240 billion in 2021.
Gelsinger previously stated that he believes the situation will last until 2023, which is consistent with the expectations of analysts and other industry executives.
Following Gelsinger’s appointment as CEO of Intel, the company announced a series of massive investments aimed at expanding chip manufacturing outside of Asia.
(It’s worth noting that a Bloomberg report from late 2021 claimed that the White House “strongly discouraged” Intel from increasing chip production in China.)
Intel said it will spend $20 billion to build two chip factories in Arizona, and another $20 billion to build “the world’s largest silicon manufacturing location” in Ohio.