New Intel CEO Pat Gelsinger warns that the global shortage of computer chips will take years to resolve.
Since 2020, there has been a global shortage of computer chips. It seems that things will not go smoothly as we expect in 2022, but it may take years to fully resolve. According to the new CEO of Intel, the problem is largely due to the Covid-19 pandemic.
Speaking to Reuters, Pat Gelsinger pointed out that the issue will affect many areas of technology, from electrical cars to computers, smartphones, tablets, game consoles, graphics cards, etc.
Why is there a shortage of chips? The silicon crisis that broke out in 2020 was a result of the following factors:
1. Teleworking: People went into teleworking because of Covid-19 and were forced to upgrade their home appliances.
2. Traffic ban: There was a great demand for new gadgets to entertain those who were on a traffic ban due to Covid-19.
3. Production issues: The recycling of chips (chip plants) has stopped temporarily due to health protocols.
Together, these factors, together with the oversupply of the global supply chain, have led to an unprecedented global demand for semiconductors that the market cannot meet. It seems that the Covid-19 pandemic caused panic not only in the lack of toilet paper but also in semiconductors.
Making matters worse, chip makers, or even a rich government, can't just throw money at it and solve the problem. They need billionsmillions dollars and 18-24 months to build a sophisticated semiconductor factory from scratch to the point where it is able to produce a satisfactory number of Chips. Intel, for its part, is investing $20 billion in two brand new factories in Arizona to expand its current chip production capacity.
On the other hand, the lack of chips will increase the acquisition cost to electronics Appliances, in cars and since every kind of device now has a chip in it, big or small, it looks like prices will go up across the board. Or as some detractors will monologue, some companies will find an opportunity to increase their profits.