Chip Shortages to Persist for 12-18 Months: Price War Between AMD & Intel Expected in Late 2021-2022

According to a report from Barron’s, chip shortages are expected to persist for at least another year, and at most two. HP and Lenovo, two of the largest PC suppliers have indicated that it’s extremely tough to acquire different components, most notably processors and graphics cards, with memory and NAND prices also on the rise. For these vendors, the primary suppliers are AMD, Intel, NVIDIA, and Micron. While Intel and NVIDIA primarily make CPUs and GPU, respectively, AMD makes both in addition to semi-custom hardware for consoles.

Micron, on the other hand, is one of the largest suppliers of memory and NAND flash used to make SSDs. Both Intel and AMD got roughly half of their overall revenue from the PC market, with Micron getting a quarter of it in 2020. As such, the PC market remains quite important for all major chipmakers. Although the growing demand for PCs is going to drop at some point, at the moment, it’s going pretty strong.

In the first quarter of 2021, processor shipments grew by a whopping 41% compared to the same period last year, the second-highest increase in history (the first one was in 1996). This has naturally resulted in shortages in various segments of the supply chain, with Dell, HP, and Lenovo all reporting low inventory and shortages of multiple major components.

In the long term, these shortages are expected to cause a price war between the two primary CPU-makers, Intel and AMD. This is likely going to happen in the last quarter of 2021 or early 2022 when Intel launches its 12th Gen Alder Lake-S processors with a hybrid core architecture and its 10nm process. We already know that this is going to cause a drop in shipments for Intel as the 10nm production is still not quite on par with the more mature 14nm process.

AMD has already been supply-constrained due to most of its products relying on TSMC’s 7nm process. If Alder Lake turns out to be a fair bit faster than the Ryzen 5000 lineup, then we can expect a reprisal from AMD likely in the form of a refresh, resulting in a price war between the two if the latter turns out to be better.



Computer hardware enthusiast, PC gamer, and almost an engineer. Former co-founder of Techquila (2017-2019), a fairly successful tech outlet. Been working on Hardware Times since 2019, an outlet dedicated to computer hardware and its applications.

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