One of the most important issues facing the American economy is the ongoing lack of semiconductor chips. Despite companies trying to ramp up production, a shortage of this critical component is being felt amongst all manner of industries. Car production, for example, is expected to drop 10% due to this lack of semiconductor chips, with President Biden recently having held a meeting to address this issue. Intel (NASDAQ: INTC) CEO spoke in an interview about the state of the industry, saying that he thinks production is going to ramp up in a big way going forward.
Intel CEO Pat Gelsinger said that he sees around ten good years of chip industry growth in the U.S. The company alone plans to spend more than $20 billion ramping up existing chip plants across the country. This includes a new facility in Arizona and a “mega fabrication” factory either in the U.S. or Europe latter this year.
Gelsinger is Intel’s newest CEO, having been appointed following the replacement of previous chief executive Bob Swan. Intel had long been having production issues under previous management. This news is seen as a good sign that Gelsinger is managing to fix problems previously plaguing the company.
“We believe the market, the world, is in a very expansionary period. I predict there’s 10 good years in front of us, because the world is becoming more digital, and everything digital needs semiconductors,” said Gelsinger in an interview with CNBC. He also added that the semiconductor industry is ripe for partnerships between different businesses. “There’s a lot of opportunities for the companies to cooperate…We look at Intel and Qualcom as true technology companies in the United States, we do a lot of advanced and fundamental research to push the industry forward.”
President Biden held a meeting earlier this year between the top chip manufacturers in the country to figure out a way to solve the current chip shortage. While the car industry has been the most affected, 5G phones, laptops, and other electric manufacturers are also feeling the squeeze due to a lack of these crucial microchips.
Intel’s stock is down around 2.1% following its CEOs’ remarks. However, shares for most chipmakers have done quite well over the past several months. With ongoing supply shortages expected to remain for a while still, companies are expected to continue reporting record-high profits amidst surging demand.
Intel Company Profile
Intel is the world’s largest chipmaker. It designs and manufactures microprocessors for the global personal computer and data center markets. Intel pioneered the x86 architecture for microprocessors. It was the prime proponent of Moore’s law for advances in semiconductor manufacturing, though the firm has recently faced manufacturing delays. While Intel’s server processor business has benefited from the shift to the cloud, the firm has also been expanding into new adjacencies as the personal computer market has stagnated. These include areas such as the Internet of Things, artificial intelligence, and automotive. Intel has been active on the merger and acquisitions front, acquiring Altera, Mobileye, and Habana Labs in order to bolster these efforts in non-PC arenas. – Warrior Trading News