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Semiconductor shortage could last years, Intel chief warns

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The global semiconductor shortage could take several years to resolve, a deficit that could have grave repercussions for the electronics and auto industries, the chief of tech firm Intel has warned.

A worldwide shift towards working and studying from home during the Covid-19 pandemic triggered a “cycle of explosive growth in semiconductors” that exerted unprecedented strain on global supply chains, Intel chief executive Pat Gelsinger told the Computex trade show virtually.

Semiconductors, sometimes known as microchips, are essential “brain” components within smartphones, radios, TVs, computers and the vast majority of electrical appliances and devices and modern cars.

The chip shortage, coupled with complications around the closure of major manufacturing factories as a result of the pandemic, was behind Apple delaying the launch of its latest iPhones last autumn and why Sony and Microsoft have not been able to produce enough PlayStation 5 and Xbox Series X consoles to keep up with demand.

Samsung, which also manufacturers its own semiconductors, admitted it was considering delaying the release of its premium Galaxy Note 21 until next year, calling the disparity between chip supply and demand “severe”.

“While the industry has taken steps to address near term constraints it could still take a couple of years for the ecosystem to address shortages of foundry capacity, substrates and components,” Mr Gelsinger said on Monday.

Semiconductors are a key export for the US, which exported around $49bn (£34.6bn) worth of the components in 2020, with around 80 per cent of its sales to overseas customers including China.

Intel, which is the world’s largest semiconductor manufacturer in terms of revenue, announced its plans to build two chip manufacturing factories in Arizona in March, adding that it also intends to confirm details of new European factories later in the year.

“We plan to expand to other locations in the US and Europe, ensuring a sustainable and secure semiconductor supply chain for the world,” Mr Gelsinger said, without elaborating further.

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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