Chip Shortage won't end until at least 2023, warns Intel CEO

The current global chip shortage will be a problem for much longer, according to Intel CEO Pat Gelsinger, who reiterated earlier today in the company's third-quarter earnings that he expects the shortage to extend through at least 2023.

"We're in the worst of it now; every quarter next year, we'll get incrementally better, but they're not going to have supply-demand balance until 2023," Gelsinger told CNBC in an interview. Intel's rival AMD seemed to have more optimistic expectations, and AMD CEO Dr Lisa Su commented at the 2021 Code Conference that while supply would be "probably tight" in the near future, "it'll get better in 2022" as production capacity continues to ramp. "It gets better next year, not immediately, but it'll gradually get better as more plants come up."Nvidia, on the other hand, shared a similar expectation of supply issues throughout 2022 for its GPUs.

Intel's less than cheerful outlook comes as the company announced a 2 percent drop in revenue for the Customer Computing Group that produces its desktop and laptop chips, led by a 5 percent drop in laptop sales. which Intel attributed to the "limitations of the laptop ecosystem." "Which means that laptop companies just don't have enough parts to go around. It's a pattern we've seen in other reports, and analysts have already highlighted component shortages as a key factor in the recent slowdown in laptop sales.

Part of the problem isn't always shortages in chips specifically, but rather with combinations of parts. "We call it match sets, where we may have the CPU, but you don't have the LCD, or you don't have the Wi-Fi. Data centres are particularly struggling with some of the power chips and some of the networking or ethernet chips," Gelsinger explains.

Some of that drop was offset by growth in desktops, where Intel posted revenue gains of 20 percent for the category, but that wasn't enough to offset the drop in laptop sales. PC sales had been on the decline for about a decade, before the pandemic, and the shift of millions to remote work and school, sent sales skyrocketing again. But with people beginning to return to offices and face-to-face education, that growth was already beginning to slow down earlier this year, a problem that has been compounded by recent component shortages.

Despite the drop in laptop revenue, Intel still saw its total revenue rise 5 percent year-over-year to $ 18.1 billion, thanks to huge growth in its data centre pools, Internet of Things. Things and Mobileye, although Intel missed its July guidance by $ 0.1 billion.