Intel CEO: "Semiconductor Shortage Will Last 2 More Years"… Warns of 1% Hit to US Growth Rate

Expansion from the Automotive Industry to All Industries
Goldman Sachs "Clear Inflation Signals"
US Growth Rate May Fall by 0.5~1%P

▲Pat Gelsinger Intel CEO [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The global semiconductor shortage crisis is expected to continue for another two years. There are also warnings that the ripple effects of the semiconductor shortage will fuel inflationary pressures and slow down economic growth.

According to the Wall Street Journal (WSJ) on the 22nd (local time), Pat Gelsinger, CEO of Intel, forecasted during the first-quarter earnings announcement that "the global semiconductor shortage could continue for another two years." The shortage, which had affected only certain industries such as automobiles in recent months, has expanded to the entire industrial sector, including electronics.

CEO Gelsinger added, "Semiconductor supply will not be resolved in the short term in the same way as building new factories."

This aligns with earlier predictions from Chinese semiconductor experts. On the 21st, Hong Kong's South China Morning Post (SCMP) reported, citing Chinese semiconductor experts, that the semiconductor supply shortage would continue not only this year but also into next year.

Since semiconductors are central to economic activities, concerns are rising that the global semiconductor supply shortage will lead not only to price increases but also to a slowdown in economic growth.

U.S. investment bank Goldman Sachs projected that product prices affected by the semiconductor shortage will rise by up to 3% throughout this year, and the inflation rate will increase by 0.4 percentage points.

Spencer Hill, an economist at Goldman Sachs, analyzed, "The impact of the semiconductor shortage on the economy will appear gradually, but the signal that inflation caused by price increases of key products will occur is clear."

Goldman Sachs also forecasted that the semiconductor shortage will reduce U.S. economic growth by 0.5 to 1 percentage point.

Economist Hill said, "Semiconductors account for only 0.3% of U.S. GDP, but products that make up 12% of GDP are affected by semiconductors," adding, "U.S. automobile production is expected to decrease by 2 to 6 percentage points this year."

However, Goldman Sachs added that as semiconductor production increases in the second half of this year, the inflationary impact will not last long.