Intel chief confident chip shortage will push into 2023
At least we can get Ketchup chips. Thanks Canada!
If you have struggled to purchase a next-gen gaming console this year, you may have failed. It’s not your fault. It’s the fault of chip manufacturers, antiquated global supply chain processes, and just dumb pandemic luck.
While supply chain issues have affected many industries, anything that uses a semiconductor chip has felt the overwhelming crunch of shortages and production issues. This is not something that will simply resolve itself in a week.
Speaking to Nikkei Asia, Intel CEO Pat Gelsinger said that while demand continues to build for semiconductors, production is nowhere near meeting that demand, pushing the chip shortage into 2023 at least. If you took high school economics, this isn’t too hard to grasp.
“The overall semiconductor shortage is quite significant and the semiconductor industry was growing about 5% per year before COVID,” said Gelsinger at a news conference in Malaysia, where Intel is expanding build capacity. “COVID disrupted the supply chains, causing it to go negative. Demand exploded to 20% year-over-year and disrupted supply chains created a very large gap… and that exploding demand has persisted.”
READ MORE: An EV battery shortage may be on the horizon
Aside from Malaysia, Intel has also announced expansions at U.S.-based facilities in Arizona and New Mexico. But these things take time to establish and build out to the point of actual production.
The gist is that anything with a chip is going to take some time to get produced. This is why my car (with a busted PCM), sat in a service center lot for upwards of five months this year. The chip shortage has hit automotive manufacturers hard.
Chipmaker AMD (which provides the chips needed for Sony Playstations and Microsoft Xbox consoles) believes that the shortage will begin to lift in the later portion of 2022 but still remain a tight market for a while.
READ MORE: Intel is building a $20 billion factory in the US to help with the global chip shortage
So there might be a sliver of hope if you were looking to gift yourself an Xbox Series X or PS5 for Christmas 2022. Chances are though, the bots will beat you to it.
Many experts saw the supply chain issues coming, as soon as the pandemic hit, including Jens Lund-Nielsen, head of Global Trade and Supply Chains at IOTA Foundation, who is optimistic that lessons might be gleaned from all this.
“It is time for companies and entire industries to rethink and transform their global supply chain models — in close collaboration with governments,” says Lund-Nielsen in Techcrunch back in December 2020, “One thing is for sure, the pandemic has already exposed the vulnerabilities of many organizations, especially those who have a solid dependence on global sourcing for raw or finished materials.”
With so much smart tech on the market these days — not just gaming consoles and cars — there just aren’t enough chips to go around, especially not for repair and replacement.
Considering people aren’t about to start driving pre-computer cars or trade-in their smart fridge for a basic white GE, the demand doesn’t appear to show any signs of slowing down.
With a new COVID variant (and likely another, and another, and another) making the rounds and countries nervously enacting restrictions again, there’s nothing that would imply that Gelsinger is incorrect in his assertion. If anything, his 2023 outlook may be too optimistic.
By the time I get my Xbox Series X in 2025, I’ll have reverted to a pre-chip state, only fighting the bots for sneaker drops and building an arcade cabinet out of cardboard and my imagination.
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