Intel CEO foresees chip shortage to last until at least 2024

Pat Gelsinger, Intel Chief has predicted that the global chip shortage will remain a challenge for the industry until at least 2024, particularly in areas such as foundry capacity and tool availability. Along with this, Gelsinger also outlined that Intel is in a "good position" to manage the constraints that arise as a result of the supply chain shortage.

During a first-quarter earnings call, he told investors, "In fact, Intel is rising to meet this challenge. Following our announcements in Arizona, New Mexico, and Ohio, we recently announced a series of investments in Europe, spanning our existing operations as well as our new investments in France and Germany -- the silicon junction.These investments position Intel to meet the future growth, and represent a significant step toward our moonshot goal of having half the world's semiconductor manufacturing located in the US and Europe."

Last September, Intel announced it was going to spend up to €80 billion over the next decade to create a "mega" chip fab in Europe, after announcing it was investing €7 billion to double the capacity of its Ireland facility and plans to bring its 7nm chip production to the plant.

Gelsinger also pointed out that ongoing COVID-19 lockdowns in Shanghai and the Russian invasion in Ukraine have demonstrated the need to promote "more resilient and more geographically balanced semiconductor manufacturing", particularly as he believes that semiconductors will be "the fuel of innovation and transformation".

He noted, however, the company's pace in which it achieves its expansion plans will also be dependent on the passing of the CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act. If passed, it would unlock an eye-watering $52 billion funding boost to US production of semiconductors.

The investment is part of a wider package of about $250 billion that covers scientific endeavours ranging from artificial intelligence to quantum communications, called the US Innovation and Competition Act. The landmark bill has so far been given the greenlight by the US Senate and House of Representatives. Now, it is awaiting debate by both chambers before it can be sent to the White House for the president's signature.

During its first-quarter results, Intel reported revenue came in at $18.4 billion, down 7% year-on-year, while net income skyrocketed by 141% to $8 billion. Revenue by business saw Intel Foundry Services soar by 175% during Q1 to $283 million.