Semiconductor Chip Shortages, Tech Stocks Tank Market, Increased Surveillance Abroad
Intel is pushing back its estimate on how long the global semiconductor chip shortage will last.
May 2, 2022 – Intel CEO Pat Gelsinger said during a conference call Thursday that his company expects the global shortage of semiconductor chips will last until 2024, a year later than his prior projections said.
The shortage is compounded by ubiquitous Taiwanese chip manufacturer Taiwan Semiconductor Manufacturing Company’s aggressive buying up of large supplies of chipmaking equipment.
This past fiscal quarter, Intel announced it will buy Tower Semiconductor and build new chip factories both in Germany and domestically in Ohio. The company’s earnings for the quarter were down 7% from its revenues just a year ago.
Through Q1, global PC sales were down 6.8%.
Gelsinger’s strategy for Intel amid the tumult of shortages involves outsourcing chip production to external manufacturers like TSMC and GlobalFoundries and exporting to other companies chips it makes itself through the new Intel Foundry Services, all while aiming to get the CHIPS Act passed through Congress so that domestic production can be bolstered.
Tech shares falling, drag market down
Amid decreasing share values all exceeding 3% at tech companies like Amazon, Apple, Google parent Alphabet, Microsoft, Netflix and PayPal, the Dow Jones Industrial Average and tech-heavy Nasdaq composite took large losses on Friday.
The Dow closed with a loss of more than 930 points – a 2.8% decline – and the Nasdaq composite dropped 4.2% on the day and more than 14% since the start of April. It’s Nasdaq’s worst monthly loss since 2008, coming just a week before the Federal Reserve is set to meet and expected to announce a 0.5-percentage point interest rate hike as inflation remains at high levels.
The stock-market lows are expected to continue early this week, just as they’ve fallen steadily this whole year as investors are rattled by inflation, the economic consequences of war in Ukraine, pandemic-related supply chain issues and additional Federal Reserve action.
All-time highs in warrantless surveillance abroad, decreasing warrants at home
An annual report from the Office for the Director of National Intelligence released last month shows that warrantless surveillance of foreigners by the U.S. reached an online high and that court-approved warrants for domestic surveillance decreased for a fourth straight year.
Last year courts approved warrants for wiretaps or physical searches against 376 targets under the Foreign Intelligence Surveillance Act – a drop from 2020’s 451 targets – of which 309 were directed at individuals on U.S. soil who were neither citizens nor permanent residents.
According to The Hill, privacy advocates have expressed concern over the increase in warrantless searches under Section 702 of FISA, which allows surveillance of foreigners outside the U.S. who use U.S.-based products like Google without the need for a court order. Figures for this type of search this year passed a previous high by roughly 25,000 to reach 232,432 targets.
The American Civil Liberties Union says broad searches violate constitutional protections against unwarranted searches and seizures.
“For anyone outside the U.S. government, the astronomical number of FBI searches of Americans’ communications is either highly alarming or entirely meaningless,” said Sen. Ron Wyden, D-Ore., in a statement.
