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Intel CEO says chip shortage could last until 2023

Intel CEO says chip shortage could last until 2023

One of the leading voices in the semiconductor industry sees the chip-supply problems stretching as far as 2023.

It could take one or two years to get back to a reasonable supply-and-demand balance in the semiconductor industry, Intel CEO Pat Gelsinger said in an interview with The Wall Street Journal after the company posted second-quarter earnings on Thursday. “We have a long way to go yet,” he said. “It just takes a long time to build [manufacturing] capacity.”

Gelsinger reiterated his comments about the shortages that he made at a trade show in May and on Fox Business’ Barron’s Roundtable in April.

“Our estimates are it’s probably two years for the industry to work through it because, as you say, it takes a while to build a fabrication, or a fab, as we like to call it in the industry,” he said during that appearance in April.

The shortage, which has snarled auto production and caused supply chain issues for a number of other industries, including cellphones and consumer electronic products, is the result of dislocations caused by COVID-19. Companies shut down production facilities in the early days of the pandemic, hampering their ability to keep up with surging demand for products needed while sheltering at home.

The Journal has reported that Intel could increase chip production through a potential acquisition of GlobalFoundries for around $30 billion. Gelsinger declined to comment during an afternoon conference call.

“At this point, we would not say that M&A is critical, but nor would we rule it out,” said Gelsinger. “Our view is that industry consolidation is very likely.”

Intel reported second-quarter earnings of $5.06 billion.

On a per-share basis, it had profit of $1.24. Earnings, adjusted for one-time gains and costs, were $1.28 per share.

The results topped Wall Street expectations for earnings of $1.06 per share.

Revenue of $19.63 billion also surpassing expectations of $17.73 billion.

For the current quarter ending in October, Intel expects its per-share earnings to be $1.10.