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Pat Gelsinger cautions the industry of semiconductor crisis continuing into 2024

In the earnings call as Pat Gelsinger, CEO, Intel Corporation announced his company’s first quarter results, he warned that microprocessor shortages are likely to run into 2024 due to Ukraine invasion and China lockdowns, and also sees reshoring as the future.

He observed, “ I continue to believe we are just at the beginning of a long-term growth cycle across semiconductors. We continue to see some match set limitations in areas like ethernet, some softening in low-end consumer PC, and some inventory adjustments, as we discussed on our last call. But overall, the demand signals from customers continue to be robust in areas like enterprise, cloud, AI, graphics, and networking. Semiconductors are the fuel of innovation and transformation across a wide range of industries.

In the supply chain, lockdowns in Shanghai and the war in Ukraine have demonstrated more than ever that the world needs more resilient and more geographically balanced semiconductor manufacturing. The chip shortage costs the U.S. economy $240 billion last year and we expect the industry will continue to see challenges until at least 2024 in areas like foundry capacity and tool availability. As an IDM, we believe we are in a good position in the industry to manage through these constraints.

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 semiconductor manufacturing located in the U.S. and Europe.

The pace at which we can reach this goal is dependent on the actions of the U.S. and other governments. America showed leadership when Congress passed the CHIPS Act, but the global situation has grown even more serious since then. The EU has been very aggressive in moving legislation forward to meet this challenge, and I recently testified before the Senate to highlight the critical need for the U.S. to fund the CHIPS Act. I continue to encourage Congress to fund this critical legislation and enable us to move faster toward making a balanced semiconductor supply chain a reality.”

CT Bureau

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