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Intel Warns: Chip Shortage Threatens EV Boom

The current global chip shortage could take until 2023 to be overcome, semiconductor maker Intel said on Monday in another warning that the microchip supply crunch could delay the electric vehicle (EV) revolution.

“But 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,” Intel’s chief executive Pat Gelsinger said during a virtual talk at the Computex trade show in Taipei, as carried by Reuters.

The semiconductor shortage—caused by surging demand for consumer electronics during the pandemic and car technology for EVs and conventional vehicles—has affected the car manufacturing industry, from delays of electric car launches to production halts of some of the most iconic U.S. cars for weeks.

Intel announced in March an estimated $20 billion investment to build two new factories in Arizona.

While expansion in chip production will address demand in several years, the current shortage is expected to last another year or two.

Earlier this month, Germany’s semiconductor maker Infineon also warned that the global microchip market could return to normal probably in 2023.

“The situation will be tight in 2022,” Infineon’s chief operations officer Jochen Hanebeck said in early May, as quoted by Fortune.

“The foundries are investing now, but the lead times to get this new capacity will be easily into 2023,” Hanebeck said.

Ford, which also has an EV strategy, said in April that it “now expects to lose about 1.1 million units of production this year to the semiconductor shortage,” with the chip shortage adversely affecting its core earnings by around $2.5 billion.

China’s EV maker Nio warned the supply crunch would hit its second-quarter deliveries.

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Tesla, for its part, is talking with providers about potentially paying in advance for semiconductors to secure chips for its cars, the Financial Times reported last week, citing sources with knowledge of the matter.

By Tsvetana Paraskova for Oilprice.com

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