- Intel’s new factory will be at Bayan Lepas and mark the expansion of Intel’s chip packaging operations.
- Intel’s investment commitment is timely considering chip shortages and potential challenges.
- According to Intel CEO Pat Gelsinger, the chip shortage will last until 2023.
Intel invests in building a new factory
Intel’s new factory will be at Bayan Lepas, near an international airport in the northern Malaysian state of Penang. This will mark the expansion of Intel’s chip packaging operations.
Intel’s new factory is expected to start production in 2024. According to the Malaysian government, the investment of 30 billion ringgit (7.1 billion USD) is expected to create over 4,000 jobs for Intel and over 5,000 jobs in the construction sector.
“Intel’s investment commitment is timely considering chip shortages and potential challenges that threaten the recovery of the global economy after the COVID-19 pandemic,” said Mr. Mohamed Azmin Ali, Malaysia’s Minister of International Trade and Development.
Intel is depending on Malaysia for some chip packaging, which is the last important step in the semiconductor chip manufacturing process. The high demand for chips during the outbreak of the Covid-19 pandemic, which caused many countries to apply social distancing and halted production activities, causing many difficulties in the supply chain of many dependent sectors into the chip.
This crisis has forced Intel and many other chip makers to constantly find ways to increase production. Besides Malaysia, Intel recently kicked off a project to build two new factories in Arizona, the USA, in September 2021. In the coming 2022, this group also hopes to announce the next factory locations in the US and Europe.
Shortage of semiconductor chip supply may last until 2023
Chip shortages have persisted for months, partly due to increased demand for electronics and partly due to supply chain disruptions. Many other industries are affected, from auto manufacturing to smartphone products and more.
According to Intel CEO Pat Gelsinger, the chip shortage will last until 2023. “The semiconductor industry this year will grow faster than in the past two to three decades. But there are still enormous gaps. I predict that the supply shortfall will last until 2023.”
Recently, the non-profit organization World Semiconductor Trade Statistics (WSTS) has published its latest forecast for global demand for semiconductor components in 2022. In which, global demand for electronic chips will increase by 8, 8% to a record high next year, following this year’s 25.6% gain.
Specifically, WSTS forecasts that the global semiconductor market will reach 601.49 billion USD in 2022, higher than the forecast of 552.96 billion USD in 2021. It forecast the Americas to lead in chip demand growth in global electronics next year with an increase of 10.3%. Followed by Japan with an increase of only 1% (up 9.3%); The Asia-Pacific region (excluding Japan) is expected to increase by 8.4% and Europe is forecast to increase by 7.1%.