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Intel Boss Predicts Chip Shortage Into 2024

Intel CEO Patrick Gelsinger.
Intel CEO Patrick Gelsinger. / Chip Somodevilla/GettyImages

Intel CEO Patrick Gelsinger says the global chip shortage will continue into 2024, as key manufacturing tools remain in short supply.

"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," he told CNBC.

This is an extension of supply chain disruptions introduced by the COVID-19 pandemic, and likely contributed to a lower-than-expected forecast for Intel's fiscal second quarter results. The company also experienced a 6% drop in share price alongside those revised forecasts.

"The overall semiconductor shortage is quite significant and the semiconductor industry was growing about 5% per year before COVID," Gelsinger said at a company event last year, when he predicted chip shortages would continue into 2023.

"COVID disrupted the supply chains, causing it to go negative... Demand exploded to 20% year-over-year and disrupted supply chains created a very large gap...and that exploding demand has persisted."

All three of the major gaming consoles use these chips, as do PC graphics cards, combining for a substantial demand and helping to drive shortages. Despite that, Xbox reported its best March of the last decade for hardware revenue, gaining market share over PlayStation.