Intel Apologizes for CPU Shortages and Shipment Delays, Which Remain Unresolved

[Tsing]

Don't expect Intel's 14 nm shortage to end any time soon. The company has published a letter of apology for its customers and partners, informing them of the fact that its production issues are still ongoing. While there is no indication of when supplies will normalize, Intel is tackling the issue by increasing both 14 nm wafer capacity and ramping 10 nm production.

To our customers and partners,

I’d like to acknowledge and sincerely apologize for the impact recent PC CPU shipment delays are having on your business and to thank you for your continued partnership. I also want to update you on our actions and investments to improve supply-demand balance and support you with performance-leading Intel products. Despite our best efforts, we have not yet resolved this challenge.

In response to continued strong demand, we have invested record levels of Capex increasing our 14nm wafer capacity this year while also ramping 10nm production. In addition to expanding Intel’s own manufacturing capability, we are increasing our use of foundries to enable Intel’s differentiated manufacturing to produce more Intel CPU products.

The added capacity allowed us to increase our second-half PC CPU supply by double digits compared with the first half of this year. However, sustained market growth in 2019 has outpaced our efforts and exceeded third-party forecasts. Supply remains extremely tight in our PC business where we are operating with limited inventory buffers. This makes us less able to absorb the impact of any production variability, which we have experienced in the quarter. This has resulted in the shipment delays you are experiencing, which we appreciate is creating significant challenges for your business. Because the impact and revised shipment schedules vary, Intel representatives are reaching out with additional information and to answer your questions.

We will continue working tirelessly to provide you with Intel products to support your innovation and growth.

Sincerely,

Michelle Johnston Holthaus
Executive Vice President
General Manager, Sales, Marketing and Communications Group

 

[DrezKill]

They should be apologizing for their prices, and all the years they barely updated their CPU families, and kept the mainstream segment on 4 cores.

 

[SmokeRngs]

It's not like this is a surprise. Intel was supposed to have been on 10nm years ago which would have allowed them to get more dies per wafer for their mainline processors and relegate the remaining 14nm fabs for second tier Intel products and third party fab orders.

Shortages are going to continue until and unless two things happen. Either Intel nails 7nm perfectly on the first try and is able to move most first line production there quickly or supply is eased by a decrease in demand due to Intel competitors picking up the slack and maybe even a bit more.

 

[LegendaryGamer]

The shortage is likely in large part due to the fact that Intel is no longer producing many of the 9 series chips. Granted this is some pretty heavy speculation, so take my commentary with a bucket of salt. However, bear with me for a second. Intel has now released their 9 series minus graphics which likely have been sitting in a pile of silicon with flawed graphics cores. These are not new chips, likely just the junk that was left over.

Intel is ramping all remaining 14nm to punch out their 10 series stop gap production to stave off AMD's unchallenged growth. 10nm is still a very flawed process node. We are seeing some mobile parts coming on it, as you don't have to worry as much about frequency on mobile and Intel's 10nm parts are clearly inferior under higher clocks.

I expect Intel will have an incredible product lineup around 2021/22 that is on 7nm. Until then they will be punching out 10 series 14nm parts to slow the bleeding and some 10nm mobile parts to get some kind of return on the massive money pit that their 10nm fabs have been.

Just my opinion