During an interview with IndianExpress from David McAfee, Corporate Vice President, Product Management and Marketing at AMD, said, “We have made significant investments in just about every element of our supply chain to ensure that we are not only able to get the supply that we think we need but that we are also investing to build additional capacity for our suppliers.” As McAfee went on to say, “it’s something that has been a significant focus area.”
The global shortage of semiconductor chips
A global shortage of semiconductor chips has had an impact on everything from personal computers and automobiles to video game consoles. Global demand for chips, which serve as the “brain” of a wide range of electronic goods, is greatly outstripping supply, and the epidemic is altering use cases in a variety of ways. AMD, one of the world’s major chipmakers, manufactures processors that are used in personal computers, video game consoles such as the PlayStation 5 and Xbox Series X, and data centers, among other applications. McAfee stated that as the exploding demand for PCs became apparent in the early days of the epidemic, AMD took steps to “source additional capacity in every stage of the supply chain, making investments on a very substantial scale internationally to guarantee that we can generate as much demand for products.” While acknowledging that more has to be done, McAfee asserted that, while the semiconductor scarcity is a hindrance, the demand for personal computers exceeds the capacity of the global semiconductor industry to meet. The pandemic has re-energized the PC market, which had been stagnant for several years. As long as remote work and learning remain popular, the demand for personal computers from corporations, educational institutions, and consumers is expected to stay strong. According to IDC data, worldwide shipments of personal computers, which include desktops, laptops, and workstations, hit 83.6 million units in the second quarter of this year. However, a global scarcity of computer chips threatens to derail the PC business just as it is reaching its zenith in terms of growth. “Before the Covid, the PC sector was experiencing a period of stagnant innovation,” he explained, adding that the pandemic has contributed to an upsurge in worldwide demand for personal computers (PCs). PCs now are considerably more premium and far more competent than the PCs that the world was previously purchasing,” McAfee asserted. Over the past 18 months, for example, we have witnessed greater growth in gaming PCs than we could have anticipated. While chipmakers such as AMD are putting out significant effort to alleviate the protracted scarcity of chips by boosting production, the reality is that establishing additional manufacturing capacity can take years. To produce a chip, can take as long as three to four months, and it includes a high-tech procedure that can only be carried out in specialized chip fabrication facilities. Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest foundry, and it serves a wide range of clients, including significant technology companies such as Apple, Qualcomm, and AMD. The difficulty is that there are very few chip fabrication facilities in the globe, and those that do exist are primarily located in Asia. To change this, the United States is encouraging companies such as Intel, the world’s largest chip manufacturer, to increase their investments in domestic semiconductor manufacturing. Experts are predicting that the worldwide chip scarcity would endure until 2023, at the earliest. The company’s mission, he explained, has been to invest in silicon production capacity and manufacturing capacity, as well as every stage of the supply chain, to drive as many prospective suppliers as possible can. The question is, “How can we bridge this vacuum as fast as possible and ensure that all of the parts are in place to attempt to sustain the global demand for PCs because they have become such an essential part of people’s lives today?”
