April 15, 2021

Disaster for automakers, gamers and everyone: Chip shortages could last into 2023

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Auto manufacturers and other companies are hoping that the global chip shortage will end soon, but snarled semiconductor supply chains may not untangle until 2023. This week, multiple tech executives offered their own estimates as part of their usual public financial disclosures, with the worst one coming in at “a couple of years.”

This terrifying estimate comes from Intel CEO Pat Gelsinger, who offered the timeframe to The Washington Post in an interview on Tuesday. He clarified that as an estimate for how long it would take the company to “build capacity” to in order to address supply shortages. The conversation came as Intel offered to step up for two supply chains particularly pinched by the silicon drought: medical supplies and in-car computer systems.

In previous statements, Gelsinger pointed to Intel’s current $20 billion plan to build a pair of factories in Arizona, and this week’s interview added praise for President Joe Biden’s proposed $50 billion chip-production infrastructure plan—though Gelsinger indicated that Biden should be ready to spend more than that.

Across the shores

TSMC CEO C.C. Wei offered dire forecasts to investors on Thursday, saying that the Taiwan-based company hoped to “offer more capacity” for meeting retail and manufacturing demand “in 2023.” TSMC, is currently moving forward with a manufacturing plant of its own in Arizona, which Bloomberg claims could cost “up to $12 billion,” despite the company clarifying that it intends to prioritize research, development, and production in its home nation.

Graphics card and SoC producer Nvidia chimed in with their own grim estimates this week, though Nvidia is optimistic that it will emerge with “sufficient supply to support sequential growth beyond Q1 2022,” according to CFO Colette Kress. Until then, “we expect demand to continue to exceed supply for much of this year,” she added.

But as tech companies struggle to navigate natural disasters, exponential consumer demand, and the building of brand-new facilities, some questions remain unanswered. Will so much scaling up of new factories pan out? Will they be able to meet their construction deadlines, and will they will be anywhere near as efficient as promised, once production ramps up? Automakers, gamers and everyone else are watching the outcomes with great interest.

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