YOU ARE AT:BusinessCould the ongoing chip shortage linger until 2023?

Could the ongoing chip shortage linger until 2023?

Intel and TSMC CEOs update on chip production outlook

An ongoing global shortage of semiconductors, caused by a number of related factors, has chip makers planning massive capital spends to bulk up production capacity and the U.S. government conducting a review of the global chip supply chain and whether it should provide subsidies to expand domestic output. President Biden recently convened a virtual meeting with relevant stakeholders and, based on reports, it doesn’t look like there’s going to be a near-term fix.

Intel CEO Pat Gelsinger told The Washington Post, “We do believe we have the ability to help. I think this is a couple of years until you are totally able to address it. It just takes a couple of years to build capacity.”

Intel has announced plans to invest $20 billion to build two new chip factories in Arizona and, under the leadership of new CEO Gelsinger, is all together overhauling its manufacturing strategy.

Taiwan-based TSMC reported it quarterly earnings has raised capex guidance to $100 billion over the next three years in an effort to increase its production capacity. On a recent earnings call, TSMC CEO field a question regarding the ramp in production capacity and also threw out a 2023 timeframe.

He said a new fabrication facility “won’t be available until 2023. And so this year and next year, I still expect the capacity tightening will continue…2023, I hope that we can offer more capacity to support our customers. And at that time, we start to see the supply chains tightening will release a little bit.”

NVIDIA’s EVP and CFO Colette Kress touched on the supply and demand imbalance in a recent press release around the company’s investor day. “Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean. We expect demand to continue to exceed supply for much of this year. We believe we will have sufficient supply to support sequential growth beyond Q1.”

Samsung plans to build a $17 billion chip fab either in its home country or one of three U.S. cities, Austin, Phoenix or somewhere in Western New York. Along with that massive price tag, reports suggest Samsung’s investment would also create approximately 1,800 new jobs. Winter weather that had a major impact on Texas’s electric and water utility infrastructure caused a shutdown of Austin-area chip fabrication facilities run by Samsung and Dutch firm NXP.


Sean Kinney, Editor in Chief
Sean Kinney, Editor in Chief
Sean focuses on multiple subject areas including 5G, Open RAN, hybrid cloud, edge computing, and Industry 4.0. He also hosts Arden Media's podcast Will 5G Change the World? Prior to his work at RCR, Sean studied journalism and literature at the University of Mississippi then spent six years based in Key West, Florida, working as a reporter for the Miami Herald Media Company. He currently lives in Fayetteville, Arkansas.

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