Supply chain disruption due to Ukraine war is not a showstopper: Intel

Intel on Friday said that the supply chain disruption due to the ongoing war in Ukraine is not a showstopper for the company.

Nivruti Rai, country head, Intel India and vice president, Intel Foundry Services, said the situation in Europe makes the supply chain complex and difficult but it's not a "showstopper".

Certain raw materials essential for the semiconductor industry are in short supply since Russia invaded Ukraine in February, for example, neon and palladium. Around half of these global semiconductor-grade materials' supply comes from these two countries, and the current crisis has hurt its supply and pricing.

Speaking to the press while launching Intel India's new state-of-the-art design and engineering center in Bengaluru on Friday, the country head of Intel India further said that chip shortage will be addressed in the next 2-3 years. "Be it exports from these (two) countries or imports, many people are struggling and suffering. But is there any showstopper for us, the answer is no."

Replying to a question as to when the chip shortage situation could start easing, Rai said the supply-side constraint will be addressed in the next 2-3 years. Pinning the hopes on continued semiconductor growth as the world drives through digitalisation.

Responding to a question on why Intel is not setting up a manufacturing unit in India despite the government's Rs 76,000 crore production-linked incentive (PLI) scheme, Rai said when India has enough demand for a semiconductor fab, it will get started. "Unless we create demand, there is going to be a mismatch. If India has a demand which is enough for a semiconductor fab, then we start and then we attract others to build their chips out of India". She added that Intel is helping create an environment and helping companies that can leverage the PLI scheme for semiconductors.

The new Intel facility in Bengaluru was inaugurated by Rajeev Chandrasekhar. The new center with 4.53 lakh square feet of space across two towers can accommodate 2,000 employees and will help the global tech giant advance its design and engineering work in client, data center, IoT, graphics, artificial intelligence, and automotive segments.