Chip shortage to get worse before it gets better, says Intel CEO

AppleInsider · June 26, 2021 1:32PM

The global chip shortage will continue to worsen for the time being, according to Intel CEO Pat Gelsinger, with the industry forecast to endure a worsening situation throughout the second half of 2021, before there's any real hope of recovery.

The shortage in semiconductor production affecting the supply of chips for electronic devices is thought to not quite reach its worst stage yet, the chief of Intel believes. Speaking in an interview, Gelsinger proposes the shoratage could reach that point before the end of 2021.

A lack of supply of semiconductors will reach its lowest point in the second half of the year before starting its road to recovery, said Gelsinger, according to Bloomberg. However, even that may not be enough for some chip production clients.

"I don't expect the chip industry is back to a healthy supply-demand situation until 2023," the Intel CEO said. "For a variety of industries, I think it's still getting worse before it gets better."

Previously in June, Gelsinger said there probably wouldn't be any real solutions to major issues facing the industry for several years, specifically to "address shortages of foundry capacity, substrates, and components."

While Intel's ownership of its factories has put it in a better position to keep up with consumer and industry demand versus companies outsourcing to others, Gelsinger pointed to other areas of computer production that are being affected by the shortages.

The chip industry is poised for a long-term period of growth, he suggests, driven by 5G, electric vehicles, and the expanded use of AI, besides the industry's efforts to end the shortage crisis.

Intel is currently in the process of implementing a $20 billion plan of action to expand production. The plan includes the creation of two chip fabrication facilities in Arizona, potentially in a bid to produce Apple Silicon chips, along with expansion across the U.S. and Europe.

Keep up with everything Apple in the weekly AppleInsider Podcast -- and get a fast news update from AppleInsider Daily. Just say, "Hey, Siri," to your HomePod mini and ask for these podcasts, and our latest HomeKit Insider episode too.If you want an ad-free main AppleInsider Podcast experience, you can support the AppleInsider podcast by subscribing for $5 per month through Apple's Podcasts app, or via Patreon if you prefer any other podcast player.

Kuyangkoh · June 26, 2021 2:05PM

Come on Intel, you are just too slow to react to changes…..

techrider · June 26, 2021 2:49PM

Take good care of your electronics people

22july2013 · June 26, 2021 3:30PM

Will used computers retain their value better now?

Beats · June 26, 2021 3:30PM

Great news for Apple!!

omasou · June 26, 2021 5:08PM

The end of the headline should read... FOR Intel.

The CEO is probably so happy to shift the blame of further delays on the pandemic instead of Intel's inability to innovate and compete.

I've always thought this whole Apple Car thing wasn't so much about "the car" but instead about the hardware, i.e. silicon and the software. Apple doesn't want to sell cars they want car makers to use their hardware and software. What's the point of this side trip? The point is if Intel doesn't figure it out Apple will eat what's left of their processor business for mobile and embedded devices.

bleab · June 26, 2021 5:38PM

omasou said:

The end of the headline should read... FOR Intel.

The CEO is probably so happy that he can blame further delays on the pandemic instead of Intel's inability to innovate and compete.

I've always thought this whole Apple Car thing wasn't so much about "the car" but instead about the hardware, i.e. silicon and the software. Apple doesn't want to sell cars they want car makers to use their hardware and software. What's the point of this side trip? The point is if Intel doesn't figure it out Apple will eat what's left of their processor business for mobile and embedded devices.

The Intel bashing is wishful thinking delusion. Thanks to the combination of Apple's small market share, terrible ARM chips by Qualcomm and MediaTek and the lack of capacity for AMD at TSMC who prioritizes mobile chips, Intel has 80% market share. Despite all of the "Intel is doomed" nonsense, this isn't going to change. Even if Apple Silicon double's the traditional macOS market share, it will still be barely over 10% and less than the ChromeOS market share for the past year. And while it seems that the Apple blogs have become AMD's biggest cheerleaders since Apple announced that they were leaving Intel, the truth is that the chip shortage has affected AMD even more. It is the reason for the latest XBox and PlayStation console shortages. Most OEMs and DIYers who want to use the latest AMD chips can't get their hands on enough to make more than a few models so they are resorting making new devices with the 10th and 11th gen Intel chips that they have on hand instead. Thanks to AMD making the decision to spin off their foundry, the main thing that keeps them from being truly able to rival Intel is TSMC's needing to make a combined 300 million iPhones and iPads a year, plus fill orders for the hundreds of millions of Qualcomm and MediaTek chips that go in Android and ChromeOS devices. Meanwhile Intel can dedicate their entire foundry output to their own chips.

Not only that but expect Intel to make inroads in the discrete GPU game in the next 2 years. AMD is going to continue to be stuck behind iPhone, iPad and Mac chips at TSMC. Nvidia is going to be held back by the combination of the bottleneck at TSMC and low yields at Samsung Foundries. So when the Intel discrete GPUs launch 3Q2021 they will sell by virtue of being pretty much the only option that people will be able to practically buy. So this whole idea that losing the 20 million CPUs that they sell Apple a year was going to set off this chain reaction that was going to bring Intel to their knees was always magical thinking, just as were the claims that iPads were going to kill off Microsoft and the endless "now THIS is what will finally kill off Android!" claims that have only recently stopped. While they certainly want it, Intel didn't need Apple's business before 2005 and they don't need it now.

waveparticle · June 26, 2021 5:55PM

The people that know the detail are hiding facts. Who are the suppliers of auto chips? No one is willing to tell this fact.

lkrupp · June 26, 2021 7:46PM

How many time have dire economic predictions turned out to be wrong?

citpeks · June 27, 2021 9:00AM

waveparticle said:

The people that know the detail are hiding facts. Who are the suppliers of auto chips? No one is willing to tell this fact.

Renesas is a big supplier to the auto industry. It had a fire in its main factory back in March, which did not help things. It also contracts production to TSMC, which, we know is quite busy, and prioritizing good clients like Apple. The recent Covid outbreak in Taiwan has also affected production there, including important suppliers needed for that production chain.

Most of the chips used in vehicles aren't sexy, like computer CPUs and GPUs. They're smaller microcontrollers, which may be based on Arm and PPC (Moto/Freescale) architectures, but built on older processes and undergo more validation testing. They have to be more conservative, because, even now, vehicles aren't frequently patched like computers and devices are; once they're made a part of a component like a engine ECU, or body computer, they're pretty much set for the life of the vehicle, running the firmware they were originally shipped with. They also live a harder life, in more varied environments in terms of climate and RF exposure. But, with more and more glass cockpits and other tech elements in new cars, chips more like computer CPUs and GPUs are seeing more frequent use.

Storms in Texas also affected Samsung's factory, which produces controllers for drives and displays, which also perform more specific functions, like the automotive chips.

Not sure why the press keeps quoting Intel, which mostly deals in CPUs and such, or why it thinks it can speak for everyone else making the chips in short supply that they don't. The people who aren't guessing, and can provide better insight are those from TSMC, Renesas, Samsung, or others like STMelectronics.

Product X isn't on shelves because Intel is falling short on supplying I5s and such to manufacturers. It's all the little supporting chips that are the issue.

sbdude · June 27, 2021 7:12PM

So when the Intel discrete GPUs launch 3Q2021 they will sell by virtue of being pretty much the only option that people will be able to practically buy.

How sad for the consumer when they have to settle for garbage because it’s the only option.

bleab · June 28, 2021 12:21AM

sbdude said:

So when the Intel discrete GPUs launch 3Q2021 they will sell by virtue of being pretty much the only option that people will be able to practically buy.

How sad for the consumer when they have to settle for garbage because it’s the only option.

It is relative. While it is less than ideal, the things that are worse than a new Intel GPU include:

0. No GPU at all
1. The 3-4 year old AMD/Nvidia GPU that not only can't keep up with the latest workloads but thanks to heat/dust damage has degraded to the point where it isn't good at the old ones anymore
2. An Apple Silicon GPU that - despite giving as much as 200% of the performance of the Intel GPU - is on a Mac that can't run the software you need.
3. A new AMD/Nvidia GPU that costs 3 times as much as it normally would because of scarcity.

The things that are better than a new Intel GPU include:

4. Nothing really.

obiwanbill · June 28, 2021 1:58AM

You created quite the “House of Cards” there … let me tug on a few cards where u got your facts wrong … Intel won’t be manufacturing their GPU’s, TSMC will! Doh! So now, any advantage you were attributing to Intel for GPU’s … doesn’t exist! In fact, it’s worse because they will be competing with AMD & NVIDIA for access to GPU chips @ TSMC.

Let’s tug on another two cards … sure, Intel can make lots of CPUs (compared to AMD) and the benchmarks are telling us, we r getting “less” than from AMD. They better be priced as the “value leader”. Whoops … so where are Intel’s sky high margins going to come from? Making CPU’s for Apple? Haha … why would Apple want to fund their competitor. They used to do that with “Scamsung”, I’m sure that lesson has been learned, deeply. Do u need a refresher?

Your House of Cards is tumbling to the ground! 😭

I bought my first computer in the mid 80’s, remember the Amiga? I’ve seen lots of stuff, my friend.

Bill

bleab said:

omasou said:

The end of the headline should read... FOR Intel.

The CEO is probably so happy that he can blame further delays on the pandemic instead of Intel's inability to innovate and compete.

I've always thought this whole Apple Car thing wasn't so much about "the car" but instead about the hardware, i.e. silicon and the software. Apple doesn't want to sell cars they want car makers to use their hardware and software. What's the point of this side trip? The point is if Intel doesn't figure it out Apple will eat what's left of their processor business for mobile and embedded devices.

The Intel bashing is wishful thinking delusion. Thanks to the combination of Apple's small market share, terrible ARM chips by Qualcomm and MediaTek and the lack of capacity for AMD at TSMC who prioritizes mobile chips, Intel has 80% market share. Despite all of the "Intel is doomed" nonsense, this isn't going to change. Even if Apple Silicon double's the traditional macOS market share, it will still be barely over 10% and less than the ChromeOS market share for the past year. And while it seems that the Apple blogs have become AMD's biggest cheerleaders since Apple announced that they were leaving Intel, the truth is that the chip shortage has affected AMD even more. It is the reason for the latest XBox and PlayStation console shortages. Most OEMs and DIYers who want to use the latest AMD chips can't get their hands on enough to make more than a few models so they are resorting making new devices with the 10th and 11th gen Intel chips that they have on hand instead. Thanks to AMD making the decision to spin off their foundry, the main thing that keeps them from being truly able to rival Intel is TSMC's needing to make a combined 300 million iPhones and iPads a year, plus fill orders for the hundreds of millions of Qualcomm and MediaTek chips that go in Android and ChromeOS devices. Meanwhile Intel can dedicate their entire foundry output to their own chips.

Not only that but expect Intel to make inroads in the discrete GPU game in the next 2 years. AMD is going to continue to be stuck behind iPhone, iPad and Mac chips at TSMC. Nvidia is going to be held back by the combination of the bottleneck at TSMC and low yields at Samsung Foundries. So when the Intel discrete GPUs launch 3Q2021 they will sell by virtue of being pretty much the only option that people will be able to practically buy. So this whole idea that losing the 20 million CPUs that they sell Apple a year was going to set off this chain reaction that was going to bring Intel to their knees was always magical thinking, just as were the claims that iPads were going to kill off Microsoft and the endless "now THIS is what will finally kill off Android!" claims that have only recently stopped. While they certainly want it, Intel didn't need Apple's business before 2005 and they don't need it now.

Chip shortage to get worse before it gets better, says Intel CEO

Comments