Intel Corp. (INTC) CEO Pat Gelsinger on Thursday warned the global semiconductor chip supply shortage could stretch two more years, The Wall Street Journal reported. 

What Happened: The rising demand for semiconductors has stressed supply chains and the shortages will continue to hit some sectors until more capacity comes online to meet chip demand. 

Gelsinger told analysts in a post-earnings call “the industry is now challenged by a shortage of foundry capacity, substrates, and components. We expect it will take a couple of years for the ecosystem to make significant investments to address these shortages.”

The shortage has sent chip companies scrambling to fill in the gaps. President Joe Biden’s administration this month met with the chip and other industry executives to ensure relevant action to address the shortage and strengthen domestic chip manufacturing. 

Biden had in his infrastructure spending budget included a $50 billion package for the semiconductor industry.  

Gelsinger told analysts that it will take a few years for the ecosystem to make significant investments to address the shortage. The company’s sales outlook for the year is $77 billion, which it says is $500 million higher than previously expected and a supply-constrained guide.

Why It Matters: The ongoing global chip shortage has disrupted manufacturing across sectors, forced global automakers to halt production and prioritize making their most profitable products first, and has also reduced the supply of items such as computers, smartphones, and some appliances. 

More industry voices are now indicating the shortages could spill over to next year and requires investment. Gelsinger, who took over as CEO in February this year, had last month pledged to revive the semiconductor giant with a $20 billion plan to spend on new factories that could help address a chip shortage. 

Intel reported earnings per share of $1.39 for the first quarter on Thursday, beating the average street estimate of $1.15. Non-GAAP revenue for the quarter stood flat year-over-year at $18.6 billion, ahead of the average street estimate of $17.90 billion.

Price Action: Shares of Intel closed 1.77% lower at $62.57 on Thursday and were further down 2.11% in after-hours.