Intel saw its stock tumbling by more than 8 per cent after the chip maker said the industry-wide component shortage affected its PC chip business during the third quarter (Q3).
Intel CEO Pat Gelsinger told CNBC late on Thursday that he didn't expect the semiconductor shortage to end until 2023.
"We're in the worst of it now, every quarter, next year we'll get incrementally better, but they're not going to have supply-demand balance until 2023," Gelsinger was quoted as saying.
The company delivered its Q3 results with revenue up 5 per cent (year-over-year) driven by strong demand in its DCG and IoTG businesses, despite the highly constrained industry-wide supply environment.
"Q3 revenue was $18.1 billion slightly below our guide due to shipping and supply constraints that impacted our businesses," George S. Davis, Chief Financial Officer, said in a statement. He also announced plans to retire from Intel in May 2022.
In the third quarter, the company generated $9.9 billion in cash from operations and paid dividends of $1.4 billion.
According to the company, the demand remains strong in its PC business with particular strength in commercial, desktop and higher-end consumer notebooks.
In an earnings call, Gelsinger said that the digitisation of everything accelerated by the four superpowers of AI, pervasive connectivity, cloud to edge infrastructure, and ubiquitous compute are driving the sustained need for more semiconductors.
"The market is expected to double to $1 trillion by 2030. In that timeframe, the market for leading-edge nodes will rise to be over 50 per cent of the total, while the market for leading-edge foundry services will grow at twice the rate of the semi-industry overall," he envisioned.
PC demand remains very strong, and "We believe the 2021 TAM (total addressable market) will grow double digits even as ecosystem shortages constrain our customer's ability to ship finished systems," Gelsinger added.
"Customers continue to choose Intel for their datacenter needs and our third gen scalable Xeon processor Ice Lake has shipped over 1 million units since launching in April, and we expect to ship over 1 million units again in Q4 alone," he informed.
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