Pat Gelsinger Intel Corp’s CEO believes it could take several years for a global shortage of semiconductors to be resolved. He told a virtual session of the Computex trade show in Taipei that work and study-from-home during the COVID-19 pandemic had led to a cycle of explosive growth in semiconductors that has placed a strain on global supply chains.
Intel, in March, announced a $20 billion plan to expand its advanced chip manufacturing capacity, building two factories in Arizona and opening its plant to outside customers. Gelsinger said the company plans to expand to other locations in the United States and Europe, to ensure a sustainable and secure semiconductor supply chain for the world.
Reports highlight that Intel’s plans could directly challenge Taiwan Semiconductor Manufacturing Co Ltd (TSMC), and South Korea’s Samsung Electronics Co Ltd. These two companies have been dominating the semiconductor manufacturing business. They have helped Asia become the hub of semiconductor manufacturing.
“While the industry has taken steps to address near term constraints it could still take a couple of years for the ecosystem to address shortage of foundry capacity, substrates and components,” Gelsinger said. “
One year of supply chain disruptions, owing to the ongoing COVID-19 pandemic, forced governments across the world to examine ways to reshore critical industries, with chip making high on the list of strategic priorities. Moreover, geopolitical tensions between China and the US led Chinese tech companies to aggressively stockpile chips and chip-making equipment in anticipation of US sanctions.
The chip shortage has already hit the carmakers, with Nissan Motor Co and Suzuki Motor Corp to temporarily halt production at some plants in June. A Nissan spokeswoman said a global shortage of semiconductors has affected parts procurement in the auto sector. “Due to the shortage, Nissan is adjusting production and taking necessary actions to ensure recovery.” Suzuki Motor spokesman said the company is still making adjustments to minimize the impact of the chip shortage. Mitsubishi Motors is also looking at reducing production by 30,000 vehicles in total in June at five plants in Japan, Thailand and Indonesia.