Intel predicts delayed rebound for chip supply

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While electronic component shortages in the semiconductor ecosystem were initially expected to last until mid-2022, constraints will persist through the rest of the year and into 2023.

This was revealed by Nitesh Doolabh, country lead for Intel in South Africa, in an e-mail interview with ITWeb.

The global computing industry has been rocked by massive supply constraints over the past two years, leading to shortages in the semiconductor ecosystem.

South Africa, like the rest of the world, has experienced the knock-on effect of these constraints, with some firms in the local tech distribution channel labelling the predicament as the “worst challenge the industry has experienced in three decades”.

“Supply chain constraints continue to temper demand, as shortages of substrates, components and foundry silicon have limited our customers' ability to ship finished systems globally,” Doolabh comments.

“We anticipate that ecosystem constraints will persist through 2022 and into 2023, with incremental improvements during this time.”

While the constraints will remain, Doolabh points out the chipmaker’s “IDM 2.0” strategy, which is an evolution of Intel’s integrated device manufacturing (IDM) model, will afford it a position to navigate the environment.

“With control over our manufacturing network and supply chain, we can react to rapid changes in demand and help solve challenges for our suppliers and partners. Equally important, as an IDM, we remain more resilient to dramatic foundry price increases as only a portion of our volume is produced by third-party foundries.”

Chip-making expansion

Given the unprecedented global demand for semiconductor components and substrates, Doolabh indicates Intel is working to advance its chip manufacturing capacity.

The company announced last year that it is investing $20 billion in two new factories in Arizona, US. According to Doolabh, an additional $20 billion investment has been set aside for a new site in Ohio.

“We plan to open these new factories to outside customers,” he states. “Additionally, we plan to expand our presence in the US and Europe to help ensure a sustainable and secure semiconductor supply chain for the world, South Africa included.”

Speaking about Intel's plans to grow its business in SA, the country lead says digitisation of everything is driving unprecedented demand in the semiconductor industry. He believes Intel is “uniquely positioned to capitalise” on this.

“Rebuilding our execution engine, we’ve made significant progress accelerating process and development, delivering on our commitments, and reenergising our culture to attract the best and brightest to Intel.

“With $1 trillion market opportunities globally ahead of us, we remain laser-focused on our IDM 2.0 strategy.

“We executed well against that strategy in Q1, delivering key product and technology milestones and announcing plans to expand our manufacturing capacity in both the US and Europe to meet the continued demand for semiconductors and drive a more balanced, resilient global supply chain.”

Photo: Lesley Moyo, ITWeb
Photo: Lesley Moyo, ITWeb

Earlier this month, Intel announced the arrival of its 12th Gen Intel Core mobile processors in SA.

According to Intel, the processors introduce its performance hybrid architecture to mobile platforms for the first time, working 40% faster than the previous generation mobile processors.

Intel introduced 28 new 12th Gen Intel Core mobile processors that deliver capabilities to create laptops for people to compute whenever and wherever they need.

At the launch, Doolabh explained that Intel partnered with local gaming specialist Evetech, to showcase and make available the mobile processor to South African gamers.

“The South African gaming community has been eagerly awaiting the much-anticipated Intel 12th Gen Core mobile processors. Intel 12th Gen is a brand-new Core architecture with the biggest change in x86 in over a decade, with Intel’s new hybrid technology with both performance and efficient cores.

“This exciting new hybrid approach allows us to bring together two different architectures via the Intel Thread Director Software.”

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