Sunday, November 28, 2021

Global chip shortage could continue till 2023 predicts Intel CEO

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Intel CEO Pat Gelsinger warned that the global chip shortage is likely to linger on for a lot longer than expected. He personally expects the shortage to extend till at least 2023.

The statement was made to CNBC late on Thursday ahead of Intel’s third-quarter 2021 financial results. The CEO also revealed that the industry-wide component shortage affected its PC chip business during Q3 which led to an 8% drop in Intel’s stocks.

Gelsinger believes that the shortage is presently at its worst, but will eventually get better incrementally with each quarter next year. The supply-demand balance cannot be expected till at least 2023.

Despite thinning supply, Intel delivered its Q3 results with a 5% YoY increase in revenue owing to strong demand in its DCG and IoT businesses.

The company also generated $9.9 billion in cash from operations and paid dividends of $1.4 billion.

George S. Davis, Chief Financial Officer, said the following in a statement, ” Q3 revenue was $18.1 billion slightly below our guide due to shipping and supply constraints that impacted our businesses.”

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George also made public his plans to retire from Intel in May 2022. Intel says that demand has remained strong in its PC business, particularly in commercial, desktop, and higher-end consumer notebooks.

The digitization of everything, pushed by the four superpowers of AI, pervasive connectivity, cloud-to-edge infrastructure, and ubiquitous computing, is driving the continued need for more chips as per Gelsinger.

He further went on to add that the market is expected to double to $1 trillion by the end of this decade. Until then, the market for leading-edge nodes will increase to over 50% of the total and the market for leading-edge foundry services will grow at twice the rate of the semi-industry overall.

Gelsinger concluded by saying, “Customers continue to choose Intel for the data center needs, and our third-gen scalable Xeon processor Ice Lake has shipped over 1 million units since launching in April, and we expect to ship over 1 million units again in Q4 alone.”

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