Intel CEO Pat Gelsinger spoke on when the chip shortage would end in December 2021. He predicted that the situation will improve in 2023 at the time. Mr. Gelsinger was speaking in Malaysia on a $7.1 billion investment in a new packaging plant. He used to say it was only a matter of supply and demand back when things were simpler.

As more chip-making capacity becomes available, these two market forces will begin to converge. Gelsinger has reevaluated the issue now that we’re far into 2022. As it turns out, a full recovery is unlikely to occur very soon due to an unanticipated development: there is now insufficient equipment available to produce silicon wafers.

This Thursday, Intel’s CEO presented his updated remarks on CNBC. His fresh views push the deadline for the chip shortage’s end back at least a year. “That’s part of the reason we believe the overall semiconductor shortage will now drift into 2024, from our earlier estimates of 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenged,” Gelsinger said, referring to the current shortage of parts and tools for lithography machines. His reference to “manufactured ramps” gets right to the core of the matter.

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Intel has been investing considerably in increasing output, but it won’t be any use until it has the machinery it needs to create chips.

Geisinger’s remarks come after the corporation recently announced enormous expansion plans. It has announced plans for new megafabs in Ohio and Germany. Its Oregon campus was also recently enlarged. According to Intel’s CEO, this is part of the company’s effort to provide redundancy and variety to its manufacturing lines. The fact that Asia produces 80 percent of the world’s silicon wafers is one of the key causes of the worldwide chip shortage.

When all of Intel’s new fabs are operational, the company aims to be able to provide an alternate source for sophisticated wafer technology. Gelsinger estimates that this will happen around 2025. Obtaining regional variety might be an important factor in deciding the success of Intel Foundry Services. Along with having sophisticated nodes to provide to third parties, of course.

Furthermore, ASML, the largest maker of silicon wafer machines, has already said that it is unable to meet demand. Worse, it predicted that it would take years to catch up with demand.

ASML’s CEO Peter Wennink stated he’s been in direct communication with Gelsinger about the matter, as we previously reported. With almost 700 enterprises in its supply chain, Wennick’s organization is particularly vulnerable.

Gelsinger stated that Intel will undoubtedly be impacted by equipment scarcity. He claims, however, that the corporation is positioning itself to address these concerns. “We’ve put a lot of money into those equipment partnerships, but it will slow down capacity expansion for us and everyone else,” Gelsinger explained.

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