While the chip shortage is easing, it is very much still ongoing and any hopes of its improving in 2023 are unlikely. That's according to Intel CEO Pat Gelsinger, who says shortages could run into 2024 because of a lack of manufacturing tools.
There has been a worldwide chip shortage that began before the pandemic in 2020 and was only exasperated during the COVID-19 crisis. Factories going into lockdown and a shortage of materials meant manufacturers were unable to build semi-conductors.
All areas of consumer and enterprise tech were affected, including home appliances, smartphones, TVs, and servers. One of the reasons the Xbox Series X and PlayStation 5 remain in short supply is because of the chip shortage. Furthermore, Microsoft put down tepid Windows uptake in 2019 down to the shortage.
However, predictions earlier this year pointed to the shortage easing during 2022 before a return to normal manufacturing in 2023. Speaking to CNBC, Intel CEO Gelsinger is pouring icy water on those hopes.
“We believe the overall semiconductor shortage will now drift into 2024, from our earlier estimates in 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenged.”
Increasing Demand
While the manufacturing constraints caused by the pandemic have eased, more demand for devices with chips is growing. It is no longer computers, consoles, and phones only. Smart technology means many home appliances use semiconductors, as well as automobiles.
In other words, factories are producing more semiconductors than they ever have before but are still struggling with demand.
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