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  • Post published:05/01/2022
  • Post last modified:05/01/2022

Intel CEO Pat Gelsinger spoke publicly about the ongoing chip shortages that are ravaging the consumer electronics industry recently, and he didn’t exactly have bright and cheery words of optimism about what the future holds. Gelsinger, who was in Malaysia to announce a $7.1B investment in a new manufacturing center there, said he predicts the shortage will last at least until 2023, and he described the current demand for chips as “exploding.”

As an overview about how we got into this mess, Nikkei Asia reports that Gelsinger explained that the chip-making industry had about a five percent annual growth rate before the pandemic hit in 2020. When that walloped everyone, he says the number went into negative territory as chip production essentially shut down, breaking supply chains on a global scale. Not long after that, when we all decided to just stay home for awhile, demand for chips exploded, resulting in a 20 percent growth rate for the past year. That unprecedented growth, overlaid on the broken supply chains, equals “chip shortage.” Gelsinger summarized the disconnect between supply and demand right now as “a very large gap,” but insists the company is working hard to fill it.

Intel CEO Pat Gelsinger has promised to return the company to its previously held status as the world leader in silicon fabrication.

As an example of Intel’s commitment to fabbing its way out of this mess, Gelsinger talked up the company’s plans to expand its silicon manufacturing capabilities in the US, Europe, and Malaysia to help offset any disruptions that might occur in one location. Intel uses its facilities in Malaysia for chip packaging, which is the final stage of chip assembly, so Gelsinger’s announcement was focused on shoring up this bit of the production line for future products. Intel has also previously announced major expansion plans in the US as it seeks to regain its former reputation as the global leader in silicon fabrication, and it’s opening up its check book to make it happen. As we reported previously, the two fabs in Arizona — Fab 52 and 62 — will cost $20 billion, and there’s plans for multiple additional fabs that will cost a jaw-dropping $100 billion over the next decade, locations unannounced thus far. Gelsinger said in the Malaysian press conference that he’d announce the sites of both the new US and European facilities “in the near future.”

One interesting tidbit from the press conference is that Mohamed Azmin Ali, who is Malaysia’s Senior Minister of International Trade and Industry, apparently helped grease the wheels for Intel’s investment by promising there won’t be any major COVID-19-related lockdowns in a future facility. “I have assured Pat that there will be no longer lockdowns, only targeted ones,” he said. “Even during the last lockdowns, we had assured minimal disruptions to the supply chain as we know how important it is to the world.”

Despite these efforts, Gelsinger notes that Intel won’t be able to fix the problem overnight, or even next year for that matter. Even though the company has been ramping up its production everywhere it can to meet demand, he says it will take approximately three years before results will be delivered in the real world.

Now Read:

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  • Farewell, 14nm: Intel Launches Alder Lake

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