Intel Admits CPU Shortages Will Continue Until Third Quarter of 2019

After Intel has slashed their forecast for 2019, Intel said in a conference call that despite its $1.5 billion investment last year to boost production capacity for its 14nm process node, the CPU shortages would not be resolved until the third quarter of the year. The company also said it would not begin volume production of 10nm chips until the holiday season of this year. Even so, a recent leaked Intel roadmap showed that most of Intel’s future CPU SKUs would be built on the 14nm process until at least the end of 2020, and potentially even longer depending on the 10nm process’ progress.

The CPU shortage has affected almost every single supplier of PC components since the second half of 2018. The company must have felt the pressure from this because its CEO has now promised to never again repeat the same mistake they made and slow down its customers’ sales.

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Intel CEO, Robert Swan, said in the conference call that:

“Our supply constraints have had a disruptive impact on our customers and ecosystem. We’ve committed never again to be a constraint on our customers’ growth. We’ve increased the capacity to improve our position in the second half, although product mix will continue to be a challenge in the third quarter as our teams align available supply with customer demand.”

A day earlier, Microsoft said Intel’s CPU shortages aren’t a big deal anymore, after stating in January that the shortages were affecting Windows sales. However, Microsoft may not be as affected in part because Intel prioritized the production of Xeon and Core i7/i9 processors that would normally be destined for systems that Microsoft’s enterprise customers would use. Additionally, some OEMs have started switching to AMD processors, which is certainly one way to end the “CPU shortages.”

Although the company said that its confidence in the 10nm process is growing and that it should have “client systems on the shelf” by holiday season this year, a leaked roadmap doesn’t paint the same picture as we have heard. Instead, it shows that most of Intel’s future desktop CPU SKUs will continue to be built on the company’s aging 14nm process up until the end of 2021, and potentially into 2022.

Intel’s new CEO said he wants to transform the company from being “PC-centric” to being “data-centric.” However, this new focus for the company seems to have started on the wrong foot, as the company’s data-centric revenues were down 5% quarter-over-quarter, while the PC-centric business grew 4%. Intel should continue to develop their PC-centric business because they are the majority shareholder of that market, but AMD has slowly crept up with Intel’s CPU shortage.

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