Sunday, 19 September 2021 09:15 GMT

Gamer's nightmare: Chip woes could extend into 2023


(MENAFN - Asia Times) If you like your video games, don't expect an end to the global semiconductor shortage anytime soon — not with the proliferation of computing and artificial intelligence in the wake of the ongoing pandemic, says Intel CEO Pat Gelsinger.

“While I expect the shortage to bottom out in the second half, it will take another one to two years before the industry is able to completely catch up with demand,” Gelsinger said during a Q2 earnings call covered by GameSpot.com .

“With major fab construction projects underway in Oregon, Arizona, Ireland, and Israel, we are investing for the future, but we are also taking action today to find innovative ways to help mitigate industry constraints.”

Gelsinger acknowledged that there's more work to do to address the semiconductor shortage, which has caused havoc around the world.

Despite that, he expects the PC market to expand as people turn to computing to complete their everyday tasks while remaining confident in Intel's direction.

“While we have work to do, we are making strides to renew our execution machine … 7nm is progressing very well,” Gelsinger said.

“We've launched new innovative products, established Intel Foundry Services, and made operation and organization changes to lay the foundation needed to win in the next phase of our company's great history.”

According to some analysts, that“great history” is under threat.

Intel's development overall has actually been slowing for many years while rivals like AMD are progressively putting pressure on its lead in PC and information center chips , while Taiwan Semiconductor is matching Intel in production.

” If you are Taiwan Semi, Samsung, AMD or NVIDIA, you have absolutely nothing to fear today from Intel 2021 since this innovation dinosaur still needs to shed its skin,” said Mirabaud Securities expert Neil Campling.

“The brand-new CEO requires to eliminate the culture of an injured animal that is hunted.”

Intel reported revenue and earnings per share that beat both the company's own forecast as well as Wall Street expectations, attributing the beat to strength in its business unit that produces chips for PCs. Intel said that PC unit sales were up 33% over last year.

The semiconductor shortage has affected numerous industries, including game console manufacturing.

That's partly why you may be experiencing difficulty buying a Nintendo Switch, PlayStation 5, and Xbox Series X|S in store or online.

Resellers have also seized upon the shortages to make a quick buck.

Sites like eBay and Facebook Marketplace are rife with ads listing these products for two or three times their original retail price.

In May, Nintendo forecast a 12% drop in sales of its flagship Switch game console, citing potential issues with procuring important components.

Hiroki Totoki, Sony's CFO, said that the group would not be able to dramatically increase the production of its new PlayStation 5 console, predicting that the semiconductor shortage would continue throughout the financial year.

The majority of semiconductors are produced in Taiwan, South Korea and China, and those countries have been impacted as badly as anywhere else by Covid-19 and took time to recover, according to CarsGuide.com .

By the time those plants were fully operational, there was a major gulf between the demand for semiconductors and the available supply.


The semiconductor shortage has affected numerous industries, including game console manufacturing. Credit Handout.

The Semiconductor Industry Association reported that demand for its product increased by 6.5 per cent in 2020 amid all the various shutdowns around the world.

The time taken to produce chips — some can take months from start to finish — combined with the long lead times to ramp up production, has left manufacturing industries around the world in a difficult position.

While all industries have been impacted by this chip shortage, the difficulty for the auto industry is that cars don't rely on just one type of semiconductor — it needs both the latest versions for things like infotainment as well as less-advanced ones for components like power windows.

According to Dan Hearsch, a managing director in AlixPartners' automotive and industrial practice, there are up to 1,400 chips in a typical vehicle today, and that number is only going to increases as the industry continues its march toward electric vehicles, ever-more connected vehicles and, eventually, autonomous vehicles.

Despite this demand, car makers are actually relatively small customers compared to the likes of tech giants like Apple and Samsung, so they haven't been given priority.

Meanwhile, after months of political jockeying and procedural hurdles, the US Senate approved a massive science and technology bill in June to boost competitiveness with China, The Verge reported .

The bill invests billions into emerging technology industries like artificial intelligence, semiconductors, and quantum computing in the US.

In its current form, the bill provides US$52 billion for domestic semiconductor manufacturing, as well as a 30% boost in funding for the National Science Foundation and US$29 billion for a new science directorate to focus on applied sciences.

The package still needs to move through the House before President Biden can sign it into law.

China consumes about 70% of global semiconductor production.

But the country's plans to mass produce 14 nm chips next year within the country is likely to make China the biggest semiconductor supplier globally.

The country is making rapid strides in becoming self-reliant and developing a strong ecosystem of semiconductor design and manufacturing.

In lithography, China's Shanghai Microelectronics Equipment Company already offers the 600/20 flagship lithography machine, which uses an argon fluoride excimer laser generating 193 nanometers deep UV light and immersion lithography for 90 nm chips.

By Q4 of this year, the company will offer machines capable of 28 nm, the equivalent of ASML's 1980Di machine.

Sources: GameSpot.com, CarsGuide.com, The Verve, CNBC, ARSTechnica.com, CTV News, TotalTelecom, Best News Marketing Gazette

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