“This is a crucial year for Intel,” says CEO Brian M. Krzanich after weaker first-quarter earnings. Intel Corp.’s new CEO said “global chip supply shortage could last two more years as the company reported lower quarterly earnings”.
According to Pat Gelsinger, supply shortages that have plagued certain sectors of the global economy for months, which would persist until more capacity is added to satisfy chip demand for anything from cars to electronics. “It’ll be a while before people are able to put more capacity in the ground,” says the author “In an interview, he expressed his thoughts. “It’s just how things are when you’re constructing new factories.”
The White House met with executives from the chip and other industries earlier this month, to discuss what steps should be taken to solve the shortage and improve the domestic chip industry. President Biden previously stated that he would address the chip shortages and include 50 billion in his massive infrastructure spending plan for the semiconductor industry.
As Gelsinger said, “The investment required at the scale required is enormous.” The CEO, who has been in charge since February, also promised to make some production capacity available as soon as possible to deal with the chip shortage.
Moreover, who is speeding up efforts to re-energize the company, said the forecast for $77 billion in revenue this year, $500 million more than previously forecast, is a “supply-constrained guide” for the year. Intel recorded a 1 percent drop in first-quarter revenue to $19.7 billion on Thursday, beating Wall Street expectations. Net income was $3.4 billion, which was dragged down by legal settlement expenses.
Intel recorded revenue of $18.6 billion and net income of $5.7 billion, except the pending sale of its memory company and other products. Two new semiconductor plants will be built in Arizona as part of the programme, which will cost $20 billion. that “this is a critical year for Intel.” Despite widespread demand for chips, Intel’s sales have fallen. Intel is being held back by several factors, according to Vivek Arya, a semiconductor analyst at Bank of America, ahead of the company’s earnings.
One of them is that an increase in demand for personal computers is focused mostly on lower-end products like Chromebooks, while Apple Inc. is abandoning Intel in favour of in-house chip designs on some of its equipment. And, after a successful year for data centre investment, Mr. Gelsinger predicts a slower rate this year.
Arya expects Intel’s revenues to lag behind the rest of the industry, which he expects to rise by about 15 percent this year. Gelsinger is attempting to resurrect a business that has struggled to produce its most innovative chip and has fallen behind Asian competitors. He stated that the company was progressing on its newest chips, though analysts have requested more information.
In addition, the business is up against stiffer competition. Nvidia Corp. and Advanced Micro Devices Inc. have taken market share from Intel, which was the most profitable chip company in America last year. Nvidia also announced this month that it will begin selling data-center central processing units, a segment that Intel has dominated for years. Intel unveiled a new data-center chip earlier this month.
