Intel CEO Warns Chip Shortage Won’t End Until At Least 2023

Intel CEO Pat Gelsinger has said that the ongoing global chip shortage may persist for a lot longer than anticipated. Intel’s CEO discloses his expectation that the shortage may persist as far as 2023 at an interview with CNBC. Gelsinger said, “We’re in the worst of it now; every quarter next year, we’ll get incrementally better, but they’re not going to have supply-demand balance until 2023.”

Meanwhile, Intel’s rival AMD thinks otherwise. AMD CEO Dr. Lisa has shown much optimism with his expectations, while making comments at this year’s Code Conference, he mentioned that he believes supply would be “likely tight” for the near future, however “it’ll get better in 2022” as production capacity continues to ramp. He said, “It gets better next year, not immediately, but it’ll gradually get better as more plants come up.”

According to The Verge, Intel’s less-than-cheerful outlook comes at a time when the company announces a 2-percent dip in revenue for the Client Computing Group that produces its desktop and laptop chips, led by a 5-percent drop in notebook sales that Intel attributed to  “notebook ecosystem constraints” — meaning that laptop manufacturers lack adequate parts to go around. It’s a pattern that has been noticed in other reports, with analysts already noting elements of the shortages as a major cause of the recent decline in laptop sales.

The problem isn’t just a shortage of chips problem particularly, but rather it’s a problem as a result of shortage combinations of parts. Gelsinger explains that “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.”

Although Intel recorded a reasonable growth in the sales of desktop PC components by 20%, however, the increase didn’t compensate for the 5% Intel lost on laptop sales. With the pandemic happening, both the PC and laptop markets have experienced unprecedented growth and rising market demand which cannot be matched as many shifted to remote work and school. It’s worth noting that Intel still saw a 5% year-over-year rise in total revenue of $18.1 billion. But with people starting coming out from remote work and returning to offices and in-person education, that growth started to drop again earlier this year, an issue that’s been further impacted by the recent component shortages.