Intel CEO says chip shortage to last ‘couple of years’

The Detroit News – by Vildana Hajric

The global semiconductor shortage roiling a wide range of industries likely won’t be resolved for a few more years, according to Intel Corp.’s new CEO Pat Gelsinger.

The company is reworking some of its factories to increase production and address the chip shortage in the auto industry, he said in an interview with CBS News, based on a transcript of “60 Minutes” that aired  Sunday. It may take at least several months for the strain on supply to even begin easing, he added.

“We have a couple of years until we catch up to this surging demand across every aspect of the business,” Gelsinger said.

“COVID showed that the global supply chain of chips is fragile and unable to react quickly to changes in demand.”

Demand for semiconductors was boosted in 2020 as consumers scooped up home gadgets during the pandemic. But meeting that increase has been hard, thanks to shuttered plants, among other factors. Companies worldwide say they expect supply-chain constraints due to logistics backlogs and the chip shortage to continue for much of 2021.

The global crunch has catapulted semiconductor firms into the limelight and to the top of political agendas. The Biden administration last month told companies vying with each other for semiconductors that he has bipartisan support for government funding to address the shortages.

Gelsinger said U.S. dominance in the industry had dwindled so much that only 12% of the world’s semiconductor manufacturing is done in the country today, from 37% a quarter of a century ago. Intel is the only manufacturer of high-end, cutting edge chips, he told CBS.

“And anybody who looks at supply chain says, That’s a problem,’” he said. “This is a big, critical industry and we want more of it on American soil: the jobs that we want in America, the control of our long-term technology future.”

He added that his company won’t be “anywhere near as focused” on its share repurchase program as it’s been up to now.

The supply constraints are hitting a wide array of industries, with tech firms and automakers alike flagging production cuts and lost revenue from the fallout.

It has forced the entire auto industry to cut output, with Ford announcing the shortage will likely reduce production by 1.1 million vehicles this year. Jaguar Land Rover Automotive Plc, Volvo Group and Mitsubishi Motors Corp. recently joined the growing list of manufacturers idling factories. Apple Inc. warned supply constraints are crimping sales of iPads and Macs.

Meanwhile, Mark Liu, chairman of Taiwan Semiconductor Manufacturing Co., told CBS his company, having heard about shortages at the end of last year, tried to “squeeze” out as many chips as possible for car companies.

“Today, we think we are two months ahead, that we can catch up (to) the minimum requirement of our customers – by the end of June,” he said.

The supply shortage may only be alleviated by the end of the year or early 2022, CBS said.

The Detroit News

3 thoughts on “Intel CEO says chip shortage to last ‘couple of years’

  1. the reason the chip shortage is hitting the auto companies harder than the computer companies is because the auto companies are cheap ass bastards that never want to pay what the market is for any item .. they beat down vendors so bad , that profit has become a 4 letter word .. i could tell you stories of how much a cheap bastard they all are but there’s not enough time in a day , yet car and truck prices are through the roof ..

    1. Every day they trim off more of this and more of that with more and more articles popping up portending ‘shortages.’ Beyond the food and water ‘shortages,’ we have gasoline, car-chip, and tire ‘shortages,’ all assists to our freedom of movement. I guess they don’t want us going anywhere. It’s a big message of “Stay put.”

      Well, they just keep calling us out, don’t they? The moment of engagement is a very personal thing. No lack of opportunities.


      1. Yes they do , it’s getting old
        And the attacks on the survivable minimums is also wearing thin
        Stockpiles of the “ shortage” items I do see
        They are trying to play the toilet paper shortage game across as many supply chains as possible , drives prices up
        But , there’s always cause and effect
        It’s not going to be like they want it … a lot of us will make dam sure of it

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