TECH NEWS – Intel CEO Pat Gelsinger expects the global semiconductor crisis to last longer than initially predicted due to supply chain failures.
There has been a global shortage of integrated circuits since the COVID-19 epidemic began in 2020. Companies such as Intel have been unable to maintain production during the crisis affecting 169 industries. Its impact on the video games industry, which is still ongoing, has resulted in a steep rise in the price of graphics cards and a drop in sales of next-generation consoles, PlayStation 5 and Xbox Series X.
While companies like Intel continue to open new production lines to help meet the growing demand, this solution will only bear fruit in the long term. In the meantime, the global chip crisis is being exacerbated by external factors such as the recent surge in neon price and the noble gas used in chip manufacturing for lasers.
The market price of neon increased six-fold between December 2021 and March 2022 due to escalating political tensions in Ukraine.
With this in mind, Intel CEO Pat Gelsinger said in a recent interview with CNBC that the global chip shortage could last for a few more years, as the unavailability of essential manufacturing equipment has extended Gelsinger’s original forecast of 2023. He went on to say that although Intel’s chips are close to meeting demand, the global semiconductor shortage is now expected to stretch until at least 2024.
The global semiconductor shortage is now expected to last until at least 2024.
The impact of Russia’s invasion of Ukraine on global neon supply cannot be underestimated, given that Ukraine produces around 50% of the world’s neon supply as a by-product of the Russian steel industry. Furthermore, Ukraine is responsible for 90% of the semiconductor-grade neon used in the US. Although companies have been trying to find alternative neon sources through Chinese producers of noble gas, increasing neon production will take several months.
In the meantime, consumers and manufacturers alike will continue to have to navigate a volatile landscape of artificially inflated retail prices and numerous supply chain issues that have companies like Nintendo producing far fewer of their Switch consoles than initially planned.
As early as last May, IBM expected the semiconductor shortage to last until 2023 or 2024.
Pat Gelsinger is hardly the only voice making sceptical predictions about the global chip crisis, as IBM said last May that the semiconductor shortage would last until 2023 or 2024. Gelsinger concludes that recent events between the Shanghai supply chain shutdown and the war in Ukraine have shown more than ever that the world needs a more flexible and geographically balanced semiconductor industry.