Intel CEO: "Semiconductor Supply Shortage May Persist Until 2023"

"Rapid Increase in Semiconductor Demand Due to Accelerated Digitalization... It Will Take a Long Time for Manufacturers to Secure Production Capacity"

Pat Gelsinger Intel CEO
Photo by Reuters Yonhap News

[Asia Economy Reporter Byunghee Park] Intel CEO Pat Gelsinger predicted that the semiconductor supply shortage could continue until 2023, according to a report by The Wall Street Journal (WSJ) on the 22nd (local time). At the announcement of Intel's Q2 earnings that day, CEO Gelsinger said that everything is becoming digital, and semiconductor demand will surge.

CEO Gelsinger said that while signs of easing the semiconductor supply shortage may appear by the end of this year, it will take a long time for the semiconductor industry to secure enough production capacity to meet the soaring demand. He predicted, "It will take about 1 to 2 years for the semiconductor industry to restore supply-demand balance." Gelsinger emphasized that everything is becoming digital, the pace of digitalization is accelerating, and Intel is facing tremendous growth opportunities.

Gelsinger was appointed CEO in February as a savior for Intel, which was in crisis. Intel was his first employer. He worked at Intel for 30 years and returned as CEO after 12 years in February.

Shortly after taking office, Gelsinger announced Intel's re-entry into the foundry (semiconductor contract manufacturing) sector. Recently, Intel has been negotiating to acquire GlobalFoundries, the world's third-largest foundry company, for about $30 billion.

While CEO Gelsinger was cautious about the acquisition negotiations, he said that mergers and acquisitions will be a long-term process of industry consolidation. He added that Intel could become a leading company driving industry consolidation. This appears to signal aggressive mergers and acquisitions.

Intel announced that its Q2 revenue and net profit reached $19.6 billion and $5.1 billion, respectively. Although these results are similar to those of Q2 last year, they exceeded Wall Street analysts' estimates compiled by FactSet Research (revenue $17.8 billion, net profit $4.2 billion).

Intel raised its full-year revenue forecast from $77 billion to $77.6 billion, surpassing analysts' expectations of $72.7 billion.

CEO Gelsinger predicted that with the release of Windows 11 at the end of this year and the return to offices after COVID-19, hardware replacement demand will increase, and the PC market boom will continue. On the other hand, he explained that hardware orders from large companies building data centers have recently slowed, likely due to high order volumes last year.

CEO Gelsinger also stated that progress is going well in securing the 7-nanometer production process technology, which was problematic last year. Intel originally planned to secure the 7-nanometer production process last year, but the plan was delayed, which led to Bob Swan stepping down as CEO and Gelsinger returning to Intel.

In March, along with re-entering the foundry sector, Gelsinger announced a $20 billion investment plan for two factories in Arizona. Then, in May, he announced a $3.5 billion investment to expand a factory in New Mexico. Gelsinger is expected to reveal additional details about future plans at Intel's annual event on the 26th.

This content was produced with the assistance of AI translation services.