Intel CEO doubles-down on multi-year chip shortage

AppleInsider

The ongoing global chip shortage will trudge on for some time to come, according to Intel CEO Pat Gelsinger, with the major issues unlikely to see any real solutions for several years.

The semiconductor shortage, which is affecting chip production around the world, is a major issue for the hardware industry. While efforts are being made to try and fix the issue, Intel's CEO doubts it will be rectified anytime soon.

In a virtual Computex session, Gelsinger said the work-from-home trend prompted by COVID-19 has led to a "cycle of explosive growth in semiconductors," which has put a strain on global supplies, reports Reuters.

"But while the industry has taken steps to address near term constraints, it could still take a couple of years for the ecosystem to address shortages of foundry capacity, substrates, and components," he said.

In April, Gelsinger believed the shortage could take "a couple of years" to fix. At the time, he also said Intel was planning to alleviate some strain in the automotive sector by producing chips for cars within six to nine months.

Gelsinger also partially elaborated on Intel's $20 billion plan to expand production, including two factories in Arizona, and offering its services to companies like Apple for chip production. "We plan to expand to other locations in the U.S. and Europe, ensuring a sustainable and secure semiconductor supply chain for the world," the CEO mentioned.

The comments from the Intel CEO offer a pessimistic view on how long it will take for the shortage to be rectified. In April, it was thought that chip production won't ease off until 2022 or later.

The issue has already triggered hefty investment, aside from Intel. GlobalFoundries, the third-largest chip producer in the world, planned to use $1.4 billion to ramp up production, while Apple chip partner TSMC expects to pump $100 billion into expanding capacity over the next three years.

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sdw2001

No way he believes that.  Seems to me that he is publicly justifying why they are putting the resources into production like they are.  

genovelle

What stood out to me was Intel investing 20 billion and Global Foundries 1.4 Billion, while TSMC is investing 100 million. 

georgebmac

As  U.S. downstream production is being affected, Trump's sanctions need to be looked at very closely -- especially those targeting Chinese chip production.  Weirdly, these sanctions were supposedly put in place for "National Defense" -- but are now working against us as U.S. prices go up and U.S. factories shut down.

U.S. sanctions on chipmaker SMIC hit at the very heart of China’s tech ambitions

• The U.S. government has reportedly imposed restrictions that require suppliers to get an export license to sell certain equipment to China’s biggest chipmaker SMIC.
• The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.
• SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years.

https://www.cnbc.com/2020/09/28/us-sanctions-against-chipmaker-smic-hit-china-tech-ambitions.html

mwhite

genovelle said:

What stood out to me was Intel investing 20 billion and Global Foundries 1.4 Billion, while TSMC is investing 100 million. 

You need to re-read it TSMC is investing 100 Billion not Million....

tmay

GeorgeBMac said:

As  U.S. downstream production is being affected, Trump's sanctions need to be looked at very closely -- especially those targeting Chinese chip production.  Weirdly, these sanctions were supposedly put in place for "National Defense" -- but are now working against us as U.S. prices go up and U.S. factories shut down.

U.S. sanctions on chipmaker SMIC hit at the very heart of China’s tech ambitions

• The U.S. government has reportedly imposed restrictions that require suppliers to get an export license to sell certain equipment to China’s biggest chipmaker SMIC.
• The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.
• SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years.

https://www.cnbc.com/2020/09/28/us-sanctions-against-chipmaker-smic-hit-china-tech-ambitions.html

Nothing in the link that you posted indicates, at all, that SMIC is in the supply chain for U.S. manufacturers.

sdw2001

GeorgeBMac said:

As  U.S. downstream production is being affected, Trump's sanctions need to be looked at very closely -- especially those targeting Chinese chip production.  Weirdly, these sanctions were supposedly put in place for "National Defense" -- but are now working against us as U.S. prices go up and U.S. factories shut down.

U.S. sanctions on chipmaker SMIC hit at the very heart of China’s tech ambitions

• The U.S. government has reportedly imposed restrictions that require suppliers to get an export license to sell certain equipment to China’s biggest chipmaker SMIC.
• The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.
• SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years.

https://www.cnbc.com/2020/09/28/us-sanctions-against-chipmaker-smic-hit-china-tech-ambitions.html

Just anti-Trump rhetoric, which of course has no place in a thread like this (nor does pro-Trump rhetoric).  We're 6 months into a new administration.  Trying to go back and make this part of the current problem is a bit silly.  

Tmay said:

Nothing in the link that you posted indicates, at all, that SMIC is in the supply chain for U.S. manufacturers.

Correct.  In fact, the article seems to indicate the opposite.  They are competitors to TSMC and others, and these sanctions impacted China's ability to be self-sufficient dramatically.  There's no indication it's affecting our supply chain.  It's about demand vs. pandemic-related production issues, something we are seeing in many sectors of the economy.  There are $6 trillion more chasing the same amount or less product.  Inflation and shortages were inevitable.  

dewme

It’s not fair to pin this problem on any single cause since there are many reasons behind the shortages, from politics to pandemic to increased demand from new consumers. Increasing production capacity will absolutely take years to bring online. 

From an Apple perspective I don’t think the issue is nearly as bad as the picture Intel’s boss is painting. Companies that have been very disciplined about proactively maintaining and managing a healthy and resilient supply chain, e.g., Apple and Toyota, appear to be better off than most to survive this disruption, although neither is totally immune.

This all gets back to a lot of the unglamorous behind-the-scenes magic that takes place within Apple that doesn’t get spotlighted in flashy product reveals or keynote speeches. Managing a supply chain that can reliably source parts into an enormous global manufacturing operation that cranks out hundreds of millions of cutting edge products every year for more than a decade, with very few significant stumbles, requires a level of insight and discipline that few companies can manage. They have to be three or four chess moves ahead of the competition while maintaining the agility to respond to any number of realtime changes in the market. Apple Silicon and the M1 wasn’t a flight of fancy cooked up two months prior to last year’s WWDC announcement. It was many years in the making, and it was just one of many efforts that Apple has taken to position themselves for success. The M1 won’t be the savior of all of the challenges ahead, but it’s one example of how Apple is always doing much more work behind the scenes than any of us realize. 

slow n easy

GeorgeBMac said:

As  U.S. downstream production is being affected, Trump's sanctions need to be looked at very closely -- especially those targeting Chinese chip production.  Weirdly, these sanctions were supposedly put in place for "National Defense" -- but are now working against us as U.S. prices go up and U.S. factories shut down.

U.S. sanctions on chipmaker SMIC hit at the very heart of China’s tech ambitions

• The U.S. government has reportedly imposed restrictions that require suppliers to get an export license to sell certain equipment to China’s biggest chipmaker SMIC.
• The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.
• SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years.

https://www.cnbc.com/2020/09/28/us-sanctions-against-chipmaker-smic-hit-china-tech-ambitions.html

I strongly support sanctions against China. I think that opening up China back in the 70’s may have been a huge mistake. It looks like China is the enemy of the West. The idea behind opening up China and making them prosperous was that after the Chinese people became wealthier, the people would demand that the country become more democratic and commit to the rule of law and behave more like Western countries. Well, that never happened. It won’t be long now when China will have the most powerful military in the world. That prospect worries me a great deal because China is absolutely not our friend. I think we should stop building factories in China and maybe instead help out other countries to build up their economies.

georgebmac

sdw2001 said:

GeorgeBMac said:

As  U.S. downstream production is being affected, Trump's sanctions need to be looked at very closely -- especially those targeting Chinese chip production.  Weirdly, these sanctions were supposedly put in place for "National Defense" -- but are now working against us as U.S. prices go up and U.S. factories shut down.

U.S. sanctions on chipmaker SMIC hit at the very heart of China’s tech ambitions

• The U.S. government has reportedly imposed restrictions that require suppliers to get an export license to sell certain equipment to China’s biggest chipmaker SMIC.
• The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.
• SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years.

https://www.cnbc.com/2020/09/28/us-sanctions-against-chipmaker-smic-hit-china-tech-ambitions.html

Just anti-Trump rhetoric, which of course has no place in a thread like this (nor does pro-Trump rhetoric).  We're 6 months into a new administration.  Trying to go back and make this part of the current problem is a bit silly.  

Tmay said:

Nothing in the link that you posted indicates, at all, that SMIC is in the supply chain for U.S. manufacturers.

Correct.  In fact, the article seems to indicate the opposite.  They are competitors to TSMC and others, and these sanctions impacted China's ability to be self-sufficient dramatically.  There's no indication it's affecting our supply chain.  It's about demand vs. pandemic-related production issues, something we are seeing in many sectors of the economy.  There are $6 trillion more chasing the same amount or less product.  Inflation and shortages were inevitable.  

It's not about Trump.  It is about his foolish, failed policies -- only some of which have been reversed.   This is one that hasn't.

As for restricting SMIC:  it's a bit foolish to restrict production from a major producer and then whine that there isn't enough production.   Even IF (and that's a big IF) SMIC has not supplied the U.S. directly, restricting their production means other producers must divert their production to fill the gap.

22july2013

So Intel is a chip PRODUCER and they are COMPLAINING about rising chip prices?

I guess Intel would prefer for chip prices, demand and sales to DROP?

tmay

GeorgeBMac said:

sdw2001 said:

GeorgeBMac said:

As  U.S. downstream production is being affected, Trump's sanctions need to be looked at very closely -- especially those targeting Chinese chip production.  Weirdly, these sanctions were supposedly put in place for "National Defense" -- but are now working against us as U.S. prices go up and U.S. factories shut down.

U.S. sanctions on chipmaker SMIC hit at the very heart of China’s tech ambitions

• The U.S. government has reportedly imposed restrictions that require suppliers to get an export license to sell certain equipment to China’s biggest chipmaker SMIC.
• The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.
• SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years.

https://www.cnbc.com/2020/09/28/us-sanctions-against-chipmaker-smic-hit-china-tech-ambitions.html

Just anti-Trump rhetoric, which of course has no place in a thread like this (nor does pro-Trump rhetoric).  We're 6 months into a new administration.  Trying to go back and make this part of the current problem is a bit silly.  

Tmay said:

Nothing in the link that you posted indicates, at all, that SMIC is in the supply chain for U.S. manufacturers.

Correct.  In fact, the article seems to indicate the opposite.  They are competitors to TSMC and others, and these sanctions impacted China's ability to be self-sufficient dramatically.  There's no indication it's affecting our supply chain.  It's about demand vs. pandemic-related production issues, something we are seeing in many sectors of the economy.  There are $6 trillion more chasing the same amount or less product.  Inflation and shortages were inevitable.  

It's not about Trump.  It is about his foolish, failed policies -- only some of which have been reversed.   This is one that hasn't.

As for restricting SMIC:  it's a bit foolish to restrict production from a major producer and then whine that there isn't enough production.   Even IF (and that's a big IF) SMIC has not supplied the U.S. directly, restricting their production means other producers must divert their production to fill the gap.

I'd surmise that the PLA will continue to have priority on SMIC production, as required for the PRC Military buildup, so yeah, it does actually make a difference to the West that these policies continue in place, and no, I don't expect the Biden administration to reverse these policies. Restricting silicon fab, and silicon design, technology from a hostile power is savvy, and very popular policy.

georgebmac

tmay said:

GeorgeBMac said:

sdw2001 said:

GeorgeBMac said:

As  U.S. downstream production is being affected, Trump's sanctions need to be looked at very closely -- especially those targeting Chinese chip production.  Weirdly, these sanctions were supposedly put in place for "National Defense" -- but are now working against us as U.S. prices go up and U.S. factories shut down.

U.S. sanctions on chipmaker SMIC hit at the very heart of China’s tech ambitions

• The U.S. government has reportedly imposed restrictions that require suppliers to get an export license to sell certain equipment to China’s biggest chipmaker SMIC.
• The move threatens to hit at the heart of China’s plans to boost its domestic semiconductor industry, a need that has been accelerated by the trade war with the U.S.
• SMIC is seen as a critical part of China’s ambitions and the commerce department’s sanctions could hold back the company’s development for several years.

https://www.cnbc.com/2020/09/28/us-sanctions-against-chipmaker-smic-hit-china-tech-ambitions.html

Just anti-Trump rhetoric, which of course has no place in a thread like this (nor does pro-Trump rhetoric).  We're 6 months into a new administration.  Trying to go back and make this part of the current problem is a bit silly.  

Tmay said:

Nothing in the link that you posted indicates, at all, that SMIC is in the supply chain for U.S. manufacturers.

Correct.  In fact, the article seems to indicate the opposite.  They are competitors to TSMC and others, and these sanctions impacted China's ability to be self-sufficient dramatically.  There's no indication it's affecting our supply chain.  It's about demand vs. pandemic-related production issues, something we are seeing in many sectors of the economy.  There are $6 trillion more chasing the same amount or less product.  Inflation and shortages were inevitable.  

It's not about Trump.  It is about his foolish, failed policies -- only some of which have been reversed.   This is one that hasn't.

As for restricting SMIC:  it's a bit foolish to restrict production from a major producer and then whine that there isn't enough production.   Even IF (and that's a big IF) SMIC has not supplied the U.S. directly, restricting their production means other producers must divert their production to fill the gap.

I'd surmise that the PLA will continue to have priority on SMIC production, as required for the PRC Military buildup, so yeah, it does actually make a difference to the West that these policies continue in place, and no, I don't expect the Biden administration to reverse these policies. Restricting silicon fab, and silicon design, technology from a hostile power is savvy, and very popular policy.

That's what all the China haters say....