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.”
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.”