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AMD CEO Lisa Su says chip shortage likely to end next year

The global chip shortage will become less severe in the second half of 2022, AMD CEO Lisa Su said on Monday, though she warned that the first half of the year will be “likely tight.”

Chipmakers are still catching up to demand following severe supply chain bottlenecks created by the pandemic. But manufacturing plants that were planned last year will likely start producing chips in the coming months, helping to alleviate shortages for PC parts and other microchips, Su said.

“We’ve always gone through cycles of ups and downs, where demand has exceeded supply, or vice versa,” Su said at the Code Conference in Beverly Hills, California. “This time, it’s different.”

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The improvements will be gradual as more manufacturing capacity becomes available, Su said.

“It might take, you know, 18 to 24 months to put on a new plant, and in some cases even longer than that,” she said. “These investments were started perhaps a year ago.”

AMD primarily sells processors and graphics chips for PCs, gaming consoles, and servers. Since the Covid-19 pandemic started in 2020, PC sales have jumped as consumers across the globe bought new computers for their homes and so their kids could attend school remotely.

“The pandemic has just taken demand to a new level,” Su said.

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But the demand for chips and PC parts has stayed high even as economies reopened, and shortages spread to other industries, including cars. That’s helped boost AMD’s stock by more than 120% since the beginning of last year, to just over $108.

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Su said that AMD supports the CHIPS Act, which became law earlier this year and includes subsidies to encourage microchip manufacturing in the U.S.

AMD doesn’t manufacturer its own chips and instead outsources production to foundries, or chip factories. AMD rival Intel said this year that it would continue to invest in microchip manufacturing and would be a foundry to other chip companies.

Last year, AMD announced it planned to buy Xilinx in a deal worth $35 billion, but the company has not yet received all the approvals it needs to complete the acquisition. Su said that AMD still sees the deal closing by the end of the year.

She added that there will likely be more dealmaking in the semiconductor industry.

“Consolidation is inevitable,” Su said. “Start-ups can do really cool things. I have tremendous respect for these folks who start their own companies. But if you want to do something very large for the industry, you know, scale is important.”

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Disclaimer: This story is auto generated by a computer program has not been created or edited by Digitechify. Publishers: The Hindu.

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