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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  • BigMamaInHouse - Friday, April 26, 2019 - link

    CPU shortages will be after second half of this year because AMD gonna fill the gap ;-). Reply
  • BigMamaInHouse - Friday, April 26, 2019 - link

    CPU shortages will be over after second half of this year because AMD gonna fill the gap ;-).
    I hope they take this into account or they gonna left with oversupply- like AMD & Nvidia after crypto crush.
    Reply
  • goatfajitas - Friday, April 26, 2019 - link

    The Intel shortage has companies buying their work PC's with AMD chips in higher numbers, and therefore they are on backlog too. Not too severe yet, but the usual 2 week lead times have turned into 4-6 weeks for AMD based systems for alot of OEM's Reply
  • BigMamaInHouse - Friday, April 26, 2019 - link

    Good info, But maybe after 7nm part's are released AMD will continue making the current 12nm part's in GF- so the availability will be better. Reply
  • goatfajitas - Friday, April 26, 2019 - link

    I am sure they will. If anything they will stick to plan or delay phaseout until inventory channels are full. Strike while Intel is weakest. Intel pulls alot of dirty tricks to try and hold leverage over OEM's but lack of stock is not one they can get away with. When corporate buyers need PC's for thier employees they need them now, cant wait 4 months for Intel production. Reply
  • Dragonstongue - Friday, April 26, 2019 - link

    exactly like Athlon days, AMD had customer lined up like crazy, but, they could not supply enough AND had to deal with Intel and others being putzes about the way things were being done (Intel did not need do a damn thing, if AMD could only give 1 cpu out of 4 needed, no dirty tactic is required to prevent the sale, you sell the other 3.....

    As you stated, no matter what dirty trick or crud Intel, Nv, AMD or anyone else would play, inventory write downs (called shrink in grocery store, need sell X at Y price but no one will buy have to throw out or sell at massive discount just to open the shelves up)

    IMO Nv and Intel both need that solid #$%^#$% punch in the throat like they did to AMD (sometimes because that is life, other times because they went out of their way to #$%#$@ AMD over just to make a few $ "blood money"

    anyways.

    w/e dirty tricks they may want to play, investor folks want to know NOW not say a year or w/e down the line that you had lost X % of total product because you had to throw it away, something like that you tell investor folks NOW take the share price hit but better that then be tied up in courts and maybe lose 10x that amount (very dangerous game it certainly is.
    Reply
  • nevcairiel - Saturday, April 27, 2019 - link

    Actually such investments like buying a whole new set of desktop PCs is usually planned way more then 4 months in advance, with the entire supply chain being aware of that demand. Reply
  • RSAUser - Wednesday, May 1, 2019 - link

    The APU line will still be 12nm, so already accounted for. Reply
  • Dragonstongue - Friday, April 26, 2019 - link

    to be "fair" both Nv and Intel need to be in the same position they forced AMD into many many times over the years, often enough by BS monkey wrench tactics even when they were not needed.

    I suppose in this case, is like Athlon days for Intel, with a twist, AMD had tons of customer Intel Nv played bs or w/e however even if they got 100% cpu orders in those days they could NOT meet demand, Intel did not need do a thing.
    Today, Intel is left with underused fabs forced to move product around, fix problems they knew about for decades, have had to "loosen" the design just to be able to make it to marker and even then at a higher cost higher defect rate etc.

    Perfect storm for the bad Intel (by their own making and terrible luck(s) AMD is hitting on all cylinders beating estimates of market and their own closing off last year minus 1 penny from estimates but very profitable year AND RnD funds/pay down directly (very very good 2017-2018 for AMD, terrible for progress Intel though they still make $$$$$$$$$$$$$$ because of higher ASP ...

    AM4, Zen 2, Vega, Navi et al if they are "close" to expected leak performance this is truly that rare clouds lining for AMD. So they get to remake their "glory" from Athlon days which was "stolen" from them, billions of dollars down the tubes, now the tables turned (irony?) hope this means they make back a good chunk of "what was theirs" to end 2019 way further ahead (benefits everyone)
    Reply
  • PaulHoule - Friday, April 26, 2019 - link

    I don't get why Intel just doesn't throw in the towel on integrated graphics. You can't even play league of legends with Intel integrated graphics, unless the whole point is feeding and making your team lose.

    If they got rid of the useless waste of die area, they could probably double their output of chips and then not have any shortage.

    But no, they've got phone envy and can't bear the thought that your PC could do anything better than a phone.
    Reply

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