Intel CEO is Pessimistic about Global Chip Supply Shortage

Intel CEO is pessimistic about the global chip supply shortage. He believes that the shortage will continue for many years.

On April 14th, Intel CEO Pat Gelsinger said in an interview after attending the White House Chip Summit that due to soaring demand and limited production capacity, it has severely hit the global chip of the automotive industry and other manufacturers. The shortage of supply will take "a few years" to ease.

Gelsinger said that semiconductor companies can take certain short-term measures to alleviate some of the crisis, and said Intel?s goal is to increase automotive chip production within six to nine months. But he said that it will take longer to completely solve this problem. Gelsinger said: "We believe that we can help, but I think it will take several years to completely solve this problem. After all, it takes time to increase production capacity."

Driven by large-scale fluctuations in the supply chain and soaring demand caused by the COVID-19, the tight supply of computer chips has hit automakers the most obvious, even forcing their factories to temporarily suspend production. However, Gelsinger said that the core shortage problem has also affected all walks of life, including manufacturers of personal computers and other equipment. Gelsinger said that at the White House Chip Summit, medical equipment suppliers also expressed deep concern about the shortage of chip supply.

Gelsinger said that Intel is always negotiating with automakers and auto parts suppliers on measures to increase auto chip production in the next few months, and said that Intel plans to start delivering additional chips within six to nine months. But he admitted: "This will never solve all problems, but it will help and relieve stress."

Willy Shih, a professor at Harvard Business School who specializes in technology and manufacturing, said that there is currently a problem that makes chip supply more complicated. That is, manufacturers are placing chip orders with multiple factories because they are not sure which orders will be accepted. He said: "Suppose you are a car manufacturer and want more chips, but the delivery time is as long as a year. How much do you want to order? Will you order from multiple sources? I bet you will. "

Shi Zhaowei said that chaotic orders make it more difficult for chip manufacturers to decide how they need to allocate supply to meet actual short-term demand. In order to ensure more domestic chip supply in the United States in the long term, the Biden government proposed to allocate 50 billion US dollars to subsidize the semiconductor manufacturing industry. This idea has been widely supported by both parties.

Gelsinger confirmed that the automaker made this statement again at the White House Chip Summit, but it was opposed by other industry leaders who did not want any industry to receive preferential treatment.

The US semiconductor industry believes that the federal government needs to provide more subsidies to compete with Asian countries. Asian countries have provided substantial financial subsidies to chip manufacturers to encourage them to build production capacity. But Shi Zhaowei said that subsidies may be a waste, and said that the world's largest chip manufacturers such as TSMC and Samsung have independently invested billions of dollars in increasing production capacity over the years.

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