Intel chief says more consolidation needed in chip industry

Intel CEO Chip manufacturing industryA few days after reports that a US chip maker was in talks to buy GlobalFoundries for $ 30 billion.

“We don’t think small players can catch up,” said Pat Gelsinger. Calling analysts to discuss Intel’s latest revenues, “non-state-of-the-art foundries” (generally a term that means foundries that don’t manufacture the smallest feature-sized computer chips) struggle to compete Then he added.

GlobalFoundries, owned by Abu Dhabi’s sovereign wealth fund Mamoura, abandoned state-of-the-art manufacturing three years ago. At the time, Intel abandoned its plan to make a 7-nanometer chip, the same process technology that Intel had been struggling with.

Gelsinger’s comments are the clearest to date that US chip makers can use dealmaking to strengthen their manufacturing base. Intel said it was in talks with 100 potential customers of the new foundry business announced in March, justifying the rapid expansion of its production facilities.

“I’m not saying M & A is important, but I can’t rule it out,” Intel CEO told Wall Street. Mamoura has not commented on the negotiations with Intel reported by The Wall Street Journal, but GLOBALFOUNDRIES has stated that it has not been discussed.

On the other hand, Intel Supply chain crisis We predicted that it could take another two years for the electronics world to emerge this summer, completely relieve pressure across the industry, and return to normal customer supply.

Supply pressures, especially the shortage of silicon wafers from which Intel will cut chips, will curb production of personal computer semiconductors this quarter, squeezing sales, the company said. The warning wiped out 2% of the share of aftermarket transactions, along with rising costs that Intel said it was facing later this year as Intel is ultimately trying to increase production of 7nm chips.

Some industry leaders predicted a faster recovery in chip supply, claiming that the shortage was artificially exacerbated by overordered customers to fill the shortfall. But Gelsinger warned for months that the problem would hinder electronics makers for much longer than many would expect, and on Thursday “it will take a year or two for the industry to catch up with demand.” Repeated.

The warning came when Intel reported surprisingly strong second-quarter earnings, thanks to the continued recovery of PC sales that began with the blockade of Covid-19. Revenue of $ 19.6 billion exceeded Wall Street’s expectations by nearly $ 2 billion. However, sales were still slightly weaker than they were a year ago when the pandemic surge in digital demand led to a surge in chip sales to cloud companies.

Intel raised its previous full-year earnings forecast by $ 1 billion to $ 73.5 billion, but after the last quarter’s $ 2 billion outperformance, it still means a $ 1 billion shortage for the rest of the year. was doing.

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