Intel CEO Pat Gelsinger said on April 28 that the US semiconductor shortage will continue until 2024, claiming that the chip shortage will cost the U.S. economy about $240 billion in 2021. Intel on Thursday forecast second-quarter revenue and profit below Wall Street expectations, citing concerns about weak demand for personal computers in its largest end market and increased supply chain uncertainty due to the Chinese lockdown. The company’s shares fell 5 per cent in after-hours trading.

Rising inflation, the resurgence of COVID-19 in China, and uncertainty over the war in Ukraine have shifted consumer spending away from gadgets, hurting Intel, which made more than half of its revenue last year from a unit that sells PC processors.

Component supply constraints remain a challenge, as the recent Shanghai lockdown has further increased supply chain risk and fueled inflationary pressures, which have negatively impacted the PC market this year, said Intel Chief Financial Officer David Zinsner.

Analysts say the PC market has shrugged off a breakneck growth rate over the past two years as remote work and learning sparked high demand during the pandemic. As China continues its lockdown, supply chain bottlenecks could hurt Intel’s customers and, in turn, the chipmaker’s business. Meanwhile, India is also in talks with Intel, GlobalFoundries Inc, and TSMC to build local operations.

Late last year, Prime Minister Narendra Modi unveiled a $10 billion incentive package proposing to pay up to half the cost of projects to entice display and semiconductor makers to set up bases in India. China has set itself an ambitious goal of becoming the world’s electronics factory, following the example of its neighbours.

“Semiconductors are a very important natural expansion for India as our underlying demand for electronics will drive demand for semiconductors. Then we have two or three areas of innovation like automotive, mobile communications, and computing, all three of which are strategic growth and focus areas, siliconisation intensity is increasing in all three areas. This further drives semiconductor growth,” he said.

“The third and very important point is that today’s semiconductors are not just fab-led or process-led. The design elements of semiconductors and the innovation of semiconductors are just as important to the future of the semiconductor ecosystem that we are very good at. So, which is very logical as our digital economy develops, and we are also creating very viable, practical opportunities for semiconductors,” he added.

Earlier today, at the opening of the three-day Semicon India Conference-2022 in Bengaluru, Modi listed six reasons why semiconductor investors should consider India. The conference aims to be a springboard for India to become a global semiconductor hub. The Prime Minister said that semiconductors are playing a key role in ways beyond people’s imagination.