The looming chip shortage has become a big problem to the manufacturers when the pandemic came. As a result, it persists to affect several companies, and per Pat Gelsinger, Intel’s new CEO, the problem won’t be “resolved” for some time.
Intel CEO’s Take on Global Semiconductor Shortage
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In an interview with CBS’s program, “60 Minutes,” Gelsinger said that several firms are now coping up with the crisis. Currently, they are addressing it by implementing an effective method to increase the production efficiency of the chips.
He added that it could take at least “several months” before the scene returns to normal. Across every business, the demand for semiconductors keeps on increasing especially when the pandemic affected the nations globally.
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How the Pandemic Struck Chip Production?
According to a report by Bloomberg, the pandemic has brought a lot of impacts to the consumers who mostly stay at home. This connects to their need of acquiring a gadget to alleviate boredom inside the house.
The demand has skyrocketed on the part of the users. However, the pandemic has also cut several businesses, and some resulted to plant shutdowns like in the case of Ford company.
As we advanced to 2022, the companies have recorded several backlogs in logistics which only heighten the intensity of the global chip shortage.
Last month, the Biden administration expressed its support to help the companies cope up with the critical semiconductor crisis.
Gelsinger noted that the share repurchase program of Intel will not be the focus of the company until the issue has been allayed.
Global Chip Shortage’s Effect on Industries
Mainly, the insufficiency of semiconductors has led several automakers and tech companies to cut production. It also led to the unforeseen loss of revenues.
Besides Ford which previously announced its move to address the problem, automakers like Mitsubishi, Volvo Group, and Jaguar Land Rover Automotive Pic were the latest car manufacturers to participate in the trend of “idle” factories.
On the other hand, Apple said that the issue could yield to the declining production of iPad and Macs.
As per Taiwan Semiconductor Manufacturing Company chairman, Mark Liu, they tried to “squeeze” the release of the chips as many as they can to serve the automakers.
Liu added that they could catch up to the demand of the customers by the end of June.
Most probably, the impact of the chip shortage could be lessened by the end of 2021. It is also possible to alleviate next year, but that does that mean that it will stop quickly.
Liu said that the semiconductor shortage happens because of COVID-19. Even though the companies are from Asia or not, the shortage will continue.
What he wants to point out is the existence of the “time lag” which directs to the complex supply chain of the car chips, in particular, Bloomberg reported.
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Written by Joseph Henry
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