Tech

Intel CEO Pat Gelsinger predicts the chip shortage will last until 2023

Forward-looking: There’s a split opinion among the tech industry’s biggest names as to when the global chip shortage will end. The more optimistic view is the second half of next year, while the opposing, and arguably more realistic, belief is that things won’t get better until 2023. Joining the latter group, sadly, is Intel CEO Pat Gelsinger.

Speaking ahead of Intel’s Q3 earnings, Gelsinger told CNBC: “We’re in the worst of it now [the semiconductor shortage], every quarter next year we’ll get incrementally better, but they’re not going to have supply-demand balance until 2023.”

Gelsinger joins the likes of auto industry analysts, semiconductor manufacturers, and Flex—the world’s third-biggest electronics contract manufacturer—in predicting the chip shortage will last at least 14 or 15 more months, if not longer.

It seems those creating the products that use the chips are more hopeful that the situation will improve sooner. Xbox boss Phil Spencer and AMD’s Lisa Su believe supply and demand will balance out next year, as does analyst firm IDC. Nvidia, meanwhile, is somewhere in the middle, predicting that graphics card supply issues will last “the vast majority” of 2022.

In addition to the depressing outlook, Intel shares fell 8% on the back of news that its Client Computing Group, which includes its chip-producing business, saw a 2% dip in revenue to $9.7 billion during the quarter ending October 2. The company said its PC sales had fallen primarily because of “notebook ecosystem constraints.”

It’s not just the lack of chips impacting laptop sales—shortages of other components are also causing problems. “We call it match sets, where we may have the CPU, but you don’t have the LCD, or you don’t have the Wi-Fi. Data centers are particularly struggling with some of the power chips and some of the networking or ethernet chips,” Gelsinger explains.

There was good news in the desktop PC category, which saw revenue gains of 20%, though it wasn’t enough to offset the decline in notebook sales.

A recent IDC report revealed that bottlenecked supply chains and ongoing logistic challenges resulted in the US PC market seeing its first quarter of annual shipment decline since the beginning of the pandemic.

H/T: The Verge

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