If you were hoping that the PC chip shortage would end soon, Intel CEO Pat Gelsinger has bad news for you. According to Gelsinger, things may not return to normal until well into 2024.
The shortfall has been almost unavoidable in the news cycle, but the recent outlook has been generally more positive – 2024 is indeed a later date than we’ve seen elsewhere. The supply of GPUs has risen in recent weeks and prices have fallen, suggesting there is light at the end of the tunnel. However, Gelsinger believes that something has changed that changes the picture.
In an interview with CNBC, Gelsinger explained that shortages are now affecting the supply of key manufacturing tools, rather than just causing a shortage of materials used in the chips. Without those tools, making the chips becomes an even bigger problem.
“That’s part of the reason we believe the overall semiconductor shortage will now drift to 2024, from our previous estimates in 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenging,” noted. Gelsinger on.
The new 2024 date is later than many industry celebrities had predicted, including AMD CEO Dr. Lisa Su and Gelsinger herself. Prior to this interview, Intel’s CEO believed that we would not see a “demand-supply balance” until 2023, with things gradually improving each quarter until then. That opinion now seems to have changed.
With the pandemic disrupting supply chains around the world, Intel has sought to diversify the location of its factories by opening plants in the US and Europe. “We have really invested in those equipment relationships, but that will dampen capacity building for us and everyone else, but we believe we are better positioned than the rest of the industry,” Gelsinger said.
But with the shortage expected to continue for another 18 months, it’s probably a good idea to temper your expectations when chip prices and availability can improve in the long run. While we’re seeing some improvements at the moment, the news from Intel shows us not to get too carried away.