Lisa Su, CEO, AMD
Scott Mlyn | CNBC
The global chip shortage will become less severe in the second half of 2022, AMD CEO Lisa Su said on Monday, warning that the first half would be “likely tight.”
Chipmakers are still catching up with demand amid severe supply chain bottlenecks created by the pandemic. But manufacturing plants that were slated for last year are likely to start producing chips in the coming months, which will help alleviate shortages of PC parts and other microchips, Su said.
“We’ve always been through cycles of ups and downs, where demand has exceeded supply, or vice versa,” Su said at the Code conference in Beverly Hills, Calif. “This time it’s different.
The improvements will be incremental as manufacturing capacity becomes available, Su said.
“It can take, you know, 18-24 months to set up a new plant, and in some cases even longer than that,” she said. “These investments started maybe a year ago.”
AMD mainly sells processors and graphics chips for PCs, game consoles and servers. Since the start of the Covid-19 pandemic in 2020, PC sales have jumped as consumers around the world bought new computers for their homes and their children could go to school remotely.
“The pandemic has just taken demand to a new level,” Su said.
But demand for PC chips and parts remained high even as economies reopened and shortages spilled over to other industries, including cars. This has helped increase AMD’s stock by over 120% since the start of last year, to just over $ 108.
Su said AMD supports the CHIPS Act, which became law earlier this year and includes subsidies to encourage the manufacture of microchips in the United States.
AMD does not manufacture its own chips and instead subcontracts production to foundries or chip factories. AMD’s rival Intel said this year it will continue to invest in chip manufacturing and be a foundry for other chip companies.
AMD last year announced plans to buy Xilinx in a $ 35 billion deal, but the company has yet to receive all the approvals needed to complete the acquisition. Su said AMD still expects to close the deal by the end of the year.
She added that there will likely be more transactions in the semiconductor industry.
“Consolidation is inevitable,” Su said. “Start-ups can do really cool things. I have immense respect for these people who start their own businesses. But if you want to do something really big for the industry, you know, scale matters. . “
LOOK: What’s the best way to solve the flea shortage crisis?