Although Intel invested some additional $1.5 billion to boost its 14 nm fab output last year, it looks like its supply problems are not going to be solved until the second half of this year. The company admitted on Thursday during its earnings conference call that supply challenges will persist throughout the third quarter.

“We have increased 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,” said Robert Swan, CEO of Intel.

Because of record demand for server and high-performance client processors last year, Intel faced difficulties meeting demand for these products in 2018. As a result, the company had to invest $1.5 billion in manufacturing tools to increase output of its CPUs and chipsets made using its 14 nm process technologies in Oregon, Arizona, Ireland, and Israel.

Due to obvious financial reasons, Intel prioritized production of high-profile products like Xeon or Core i7/i9 over manufacturing of lower-end products, such as Atom, Celeron, or Pentium. This practice is expected to continue, so it will be somewhat easier to obtain a high-end part rather than an entry-level processor at least until the end of Q3.

A bit of good news, however, is that Intel started production of its Ice Lake-U CPUs in the first quarter. And, because of its factory network optimization, the company can produce more of such processors than it initially anticipated. Volume production of 10 nm CPUs will reduce pressure on 14 nm capacity and to a degree lower demand for 14 nm mobile products. As a result, the supply situation with Intel’s products made using 14 nm process technologies will likely be generally better in the second half of 2019.

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Source: Intel

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  • 808Hilo - Friday, April 26, 2019 - link

    There is no CPU shortage. Intel wants to upsell you. The IT spoof of putting old, broken and unneeded business processes in sw and on servers needs to end because it severly hampers flexibility and growth and is an ecological nightmare. AMD is ahead. Many cores is the way to go for D and S. Security problems with Inteldesigns make it a faulty business desicion to buy Intel and Intel actually cannot sell all their produce. The article is propagandist. No shortage.
  • Yojimbo - Saturday, April 27, 2019 - link

    People don't buy their systems from Intel, they buy them from Lenovo, HP, Dell, etc. The overwhelming majority of people making purchases of the low cost machines affected by the shortages will never have any idea about anything Intel says in their earnings reports. Do you think Intel is lying to Dell, HP, etc., or do you think Dell, HP, etc. are complicit in the deception to suddenly not service the lowest end of the market? If Intel has no interest in supplying the low end of the market they can just exit it, they don't need to make up stories.

    It makes sense that due to Intel's continued problems with their 10 nm nodes that they have fabs tooled for 10nm that are underutilized while their 14 nm fabs are running at full capacity.
  • HStewart - Thursday, May 2, 2019 - link

    I think a lot of people live with blinders on and expect that majority of people still build their PC's. Those day have gone and most think of desktop computer has something from 80's or 90's. If you can't carry it and use it on road it is consider junk.

    I differ with you in thinking that Intel does not care about low end of computers - maybe not low end desktop - consider there investment in Foveros technology with a single fast sunny cove (10nm) CPU a long with 4 low power atom processors - this is for low end computers - but it save power when you don't need and provide enough single core power would do it. With chip that could be put on finger tip. Who knows how powerful this thing will be, I would not doubt at all, it could be replacement in Dell XPS 13 2in1 with more power and 20 plus hour battery life. I think Intel ultimate goal with Foveros / Lakefield is to complete with power savings of ARM and with power of PC.

    But I will be honest, I have not been impressed with ARM power lately, it seams I must charge my Samsung Tab S3 ever night. Maybe it just Samsung trying to make me upgrade the tablet.
  • 0ldman79 - Tuesday, May 7, 2019 - link

    Pretty sure there is.

    I don't know what their yields are on 14nm, but given they released the F cores without the iGPU and they more than doubled the transistors by moving up to 8 cores per die... I don't imagine their yields have improved. Pretty sure the shortage is because they're making larger and larger die and having worse yields.
  • Gastec - Sunday, April 28, 2019 - link

    Let there be shortage! No rush. What, you don't have enough money to take with you to the grave?
  • Tilmitt - Monday, April 29, 2019 - link

    I can't believe they can rerelease Skylake for 5 years a row and the world is still buying every CPU they can make.
  • HStewart - Thursday, May 2, 2019 - link

    I hope people realize that Q3 starts in 60 days - small amount of time in tech industry if it means entire Q3. Not sure this is real problem - I am sure vendors of notebooks and such have enough inventory to feel the demand - what is important is the Q4.
  • HStewart - Thursday, May 2, 2019 - link

    I am really questioning these items - I not seeing any actual Intel response on these predication. Only thing that seems for sure is that Notebooks on 10nm from Dell and Lenovo have been spotted to come this holiday season.

    But the bad thing about these rumors is that it makes uneducated places like WCCFtech come up with articles stating that 10nm is delayed to 2021 or even later which appears by OEM's that this is false information.

    I have no stock with any of these companies, but if I was Intel, I would be release information for damage control on misleading false information like on WCCFtech.

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