Intel CEO Pat Gelsinger warned that the global chip shortage will likely linger for a lot longer. He said that he expects the shortage to extend at least until 2023.
The statement was made to CNBC late on Thursday ahead of Intel’s third-quarter 2021 financial results. The CEO also revealed that the industry-wide component shortage affected its PC chip business during the third quarter which led to an 8% drop in Intel’s stocks.
Gelsinger believes that the shortage is presently at its worst but will get better incrementally with each quarter next year. Supply-demand balance cannot be expected until at least 2023 though.
But despite thinning supply, Intel delivered its third-quarter results with a 5% YoY increase in revenue owing to strong demand in its DCG and IoTG businesses. The company also generated $9.9 billion in cash from operations and paid dividends of $1.4 billion.
“Q3 revenue was $18.1 billion slightly below our guide due to shipping and supply constraints that impacted our businesses,” George S. Davis, Chief Financial Officer, said in a statement. He also announced plans to retire from Intel in May 2022.
Intel says that demand has remained strong in its PC business, particularly in commercial, desktop, and higher-end consumer notebooks.
The digitization of everything, pushed by the four superpowers of AI, pervasive connectivity, cloud-to-edge infrastructure, and ubiquitous computing, is driving the continued need for more chips according to Gelsinger.
He further added that the market is expected to double to $1 trillion by the end of this decade. Until then, the market for leading-edge nodes will increase to over 50 per cent of the total and the market for leading-edge foundry services will grow at twice the rate of the semi-industry overall.
“Customers continue to choose Intel for their datacenter needs and our third-gen scalable Xeon processor Ice Lake has shipped over 1 million units since launching in April, and we expect to ship over 1 million units again in Q4 alone,” Gelsinger said.
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