Pat Gelsinger, the CEO of Intel, predicted six months ago that the worldwide chip scarcity would endure until at least 2023, and now he thinks we may not be out of the woods until 2024.
Because the equipment shortages have struck and some of those manufacturing ramps have become more difficult,” he said on Friday, “we expect that the total semiconductor shortfall will now drift into 2024, from our original projections in 2023.”
The “chip scarcity” is a developing phenomenon that doesn’t effect every kind of chip at the same time, despite the doom and gloom tone. As time goes on, some industries and component types have been struck worse than others. Even Intel’s own processors are performing rather well. “Intel fabs and our substrate supply are close to fulfilling our customers’ demand for the first time in years,” Gelsinger said yesterday during the company’s Q1 2022 earnings call.
There will be a long-term supply deficit for new items developed on new lines, not simply current ones, when Gelsinger predicts that the scarcity would last until 2024. We anticipate issues in areas like foundry capacity and tool availability, as an IDM, to remain until at least 2024, he stated on the call yesterday. According to Digitimes, the backlog of chipmaking equipment vendors has grown from about six months last year to over 18 months presently.
Even though CPUs, GPUs, and consoles were some of the most high-profile commodities affected by supply shortages, they seem to be returning to normal. Gelsinger, however, cited ethernet as an example of a “ecosystem supply restriction” that has been slowing down PC sales because of a scarcity of networking chips.
Client Computing Group (which deals with consumer processors, among other things) shares are down 13% this quarter, but that’s not the reason. A “ramp-up of the Apple CPU and modem business,” as well as “OEM inventory burn,” as well as a “reduced consumer and education demand” – schools are purchasing fewer Chromebooks and Apple has all but entirely migrated away from Intel to its own M1 processor, which left Intel laptops in the dust.
Although the present schedule predicts none of these new fabs will go online until the chip crisis is gone, Intel is one of the firms investing aggressively in new production lines, constructing fabs in Ohio, Arizona, and Germany. New fabs are slated to open in Chandler, Arizona, in 2024.