Pat Gelsinger, the CEO of Intel, issued a warning this past Friday that the current shortage for semiconductors seems like it will last out until at least 2024.
Due to this, certain tools used in manufacturing remain entirely unavailable, which continued to threaten a constraint on the world’s chipmaking capacity, as stated by an executive to CNBC.
“That’s part of the reason that 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,” stated Gelsinger.
“We’ve really invested in those equipment relationships,” Gelsinger went on while talking about the overall diversification of chipmaking out of Asian countries, “but that will be tempering the build-out of capacity for us and everybody else, but we believe we’re positioned better than the rest of the industry.”
CNBC went on to note that Intel is very heartily investing in semiconductor factories located in both Europe and the United States.
The economies of quite a few Asian countries have been under severe lockdown measures as a response to COVID-19, causing extreme bottlenecks throughout the supply chain for global semiconductors. Quite a few automotive companies have been forced to halt or limit production because of this problem. This has caused the worsening of inflationary pressures due to causing spikes in the prices of vehicles to sit a the highest rate in the past few decades.
For example, Tesla has not produced any new models for 2022. “The rate of growth will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain,” stated the company in a presentation to shareholders that announced the company’s earnings for fourth-quarter 2021. “Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022.”
As a response, quite a few of these companies are rushing to build brand new manufacturing facilities, even as many local officials are attempting to encourage this production to move to their respective states.
Currently, Samsung is constructing a $17billion factory for semiconductors out in Taylor, Texas, which comes with the title of the largest foreign direct investment in the history of the state.
“Companies like Samsung continue to invest in Texas because of our world-class business climate and exceptional workforce,” stated Governor Greg Abbott (R-TX) in response this past November. “Samsung’s new semiconductor manufacturing facility in Taylor will bring countless opportunities for hardworking Central Texans and their families and will play a major role in our state’s continued exceptionalism in the semiconductor industry.”
All the while, Governor Ron DeSantis (R-FL) has stated that he would be investing in the increase of microchip and semiconductor manufacturing in Florida using state funds in order to block the Chinese Communist Party and ensure they could not “hold our supply chain hostage.”
“We have to start standing up as Floridians and Americans,” stated DeSantis via a press conference. “We cannot be captive. Key sectors of our economy should not be captive to some of these foreign nations, particularly outfits like the Communist Party of China.”
“And then even when you have allies like Taiwan, how that could impact, if there was a disruption there, could throw a lot of this through the loop even more than we’ve seen over the past year and a half,” he went on. “So the more we have this capacity within our own country, but particularly within our own state here in Florida, the more opportunities there’s going to be for people and the more secure both our economic supply chains will be and our national security.”