Shortages of Intel’s CPUs have persisted for well over a year now, but according to Dell, they actually got worse in the ongoing quarter because of unexpectedly high demand for client computers and servers. As a result, the company had to cut its revenue forecast for the fourth quarter as sales of its PCs were impacted by the tight supply.

Last week Intel issued a letter apologizing for CPU shipment delays because despite of the fact that it increased its 14 nm capacity by 25% year-over-year in 2019, demand still outpaced supply. Furthermore, Intel experienced production variability in the fourth quarter and because it had limited inventory buffers, it could not absorb the impact. Intel did not explain what variability meant in this case, but based on comments from Dell, it looks like Intel could not produce enough processors for commercial and premium system.

Here is what Jeffrey Clarke, COO of Dell, had to say:

“Intel CPU shortages have worsened quarter-over-quarter the shortages are now impacting our commercial PC and premium consumer PC Q4 forecasted shipments.”

Even though Intel’s supply and demand balance is not favorable to makers of systems, Dell’s PC business revenue was on the rise in Q3 increasing to $11.4 billion by 5% year-over-year. Sales of commercial PCs were up 9% to $8.3 billion, whereas shipments of consumer computers were up 6% to $3.1 billion.

It is particularly noteworthy that Dell remains cautious about Intel CPU supplies going forward, though it naturally does not make any actual predictions, but rather promises to monitor situation and adjust forecasts. Dell is not the first PC company that is cautious about Intel’s ability to meet demand as ASUS also expressed similar concerns earlier this month.

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Sources: Dell, Reuters

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  • Sttm - Wednesday, November 27, 2019 - link

    This is still to me the most surprising story of the year. AMD steals Intel's lunch on the desktop with 7nm parts, and Intel still cannot meet 14nm demand. Reply
  • yeeeeman - Thursday, November 28, 2019 - link

    Oems get competitive prices given the fact that they buy a lot of CPUs. And till 8 cores CPUs you cannot say that Intel is shit and AMD is amazing, they are close in performance, Intel is better in gaming, AMD better in some productivity stuff. Power consumption is also close, 9900k is not that much thirsty compared to 3700x. For laptops I don't think we need to discuss, Intel is clearly better, at least for now. As for workstation, starting with the new threadripper lineup, yes, they might lose some orders. In the server space also. But OEMs will keep using Intel products, since the prices Intel sells the CPUs to them are much lower than what we pay and in general it is hard for an OEM to change platform. You need to redesign stuff, change things, it is not worth it until a certain point. Reply
  • Jimbo Jones - Thursday, November 28, 2019 - link

    @yeeeeman

    "9900k is not that much thirsty compared to 3700x" -- you sure about that? I can't find a review that doesn't have an overclocked 3700x consuming less power than a stock 9900k under load. The 3700x is considerably more efficient in every review I have seen.

    Note that a 9900K can pull up to 250w (at the socket - not full system) at stock clocks under heavy AVX load. Check Tom's Hardware 9900k review if you have doubts.
    Reply
  • AshlayW - Friday, November 29, 2019 - link

    9900K is sometimes nearly twice the power use of 3700X for 15-20% more performance. Reply
  • schujj07 - Monday, December 2, 2019 - link

    The 3700X is most of the time within 5% of the stock 9900K in gaming and leads in more than half of productivity tasks, while using 1/3 the power. Reply
  • ArcadeEngineer - Thursday, November 28, 2019 - link

    Shipments are up overall and both companies are selling every chip they can make, they're not really competing much in the sense of one losing out. AMD are focusing on high-margin chips due to supply constraints (at least on 7nm)just like intel is. Reply
  • Gondalf - Thursday, November 28, 2019 - link

    The story is next year Pc market will go severely down.
    Tell me a single reason for Intel to enlarge 14nm production when there is a bad forecast on 2020 cpu demand.
    Reply
  • melgross - Thursday, November 28, 2019 - link

    Demand for Intel chips is very high. and AMD has again failed to move in HPC as they had hoped. In fact, their sales there have been disappointing, and below their forecasted numbers.

    While AMDs stock is at highs due to their chip lines advancing the way they have been, and yes, sales in some areas have risen, it’s again in the lower profit lines. and is just not going anywhere other than in lower priced products, as usual.

    Intel is now producing 10nm in quantity, and increasing production there. They are also increasing 14nm production, but that’s likely a temporary boost until 10nm reaches parity with 14nm. As we all know, whether we’re happy with it or not, that Intel’s limes are more advanced than the competition in that their 14nm is about where 10nm is for everyone else, and that their new 10nm line, despite setbacks, is close to 7nm from everyone else.

    The fact that they can have parity, sometimes better, and sometimes a bit worse, in single core performance shows that. If AMD can’t pull substantially ahead in single core performance and power draw, which it hasn’t, with a second generation 7nm process,, then their tech isn’t as good as some would like to believe. And everyone in the industry knows that.
    Reply
  • Gondalf - Thursday, November 28, 2019 - link

    Not that Intel stand still in core development. Willow Cove look nice with a stunning 1.25 MB of L2 and a finally larger L3.
    Bet AMD have to ship Zen 4 to meet Willow in IPC. But at that time Golden Cove will be out.
    Reply
  • Korguz - Thursday, November 28, 2019 - link

    melgross/gondalf...
    care to post some links/proof of your claims ??? cause your posts.. sound more like pro intel opinions then anything
    Reply

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