Intel has apologized for the CPU shortages which have plagued would-be buyers of its processors for some time now, in a letter published via its online newsroom.
The letter, written by Michelle Johnston Holthaus, executive VP and GM of Sales, Marketing and Communications at Intel, begins: “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.”
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As you’re probably aware, issues around stock shortages have blighted Intel for some time now, and the chip giant’s problems in producing enough 14nm CPUs to meet demand have been ongoing since way back last year (tied in with even more prolonged struggles to get 10nm to be viable in terms of mass production).
In the letter, Intel further observed that it has invested ‘record’ levels of capital in increasing 14nm wafer capacity throughout the course of 2019 (while also ramping up 10nm).
The company also said it had expanded its own manufacturing capability, and increased the use of foundries to produce more Intel processors, efforts which have all led to boosting its PC CPU supply by ‘double digits’ in the second half of this year compared to H1 2019.
But Holthaus then notes: “However, sustained market growth [in PCs] in 2019 has outpaced our efforts and exceeded third-party forecasts.”
The demand for CPUs is such that Intel still cannot meet it, despite all these efforts, is essentially the long and short of the situation as it stands.
With supply remaining tight, Intel says that it’s “less able to absorb the impact of any production variability, which we have experienced in the quarter”.
We recently heard rumors (from Intel partners including big-name laptop manufacturers) that the CPU shortages could continue well into 2020, for at least another quarter or two, and that speculation would seem to marry with Intel’s latest comments on the matter.
Meanwhile, Intel faces further pressures from AMD which is kicking up a storm with its latest Ryzen 3000 processors, not to mention Epyc server chips. And this leaves Intel in a strange and uncomfortable position whereby it is staring down the barrel of an intense supply/demand conundrum, while simultaneously facing major pressures from AMD that has meant Intel has been forced to slash prices on some CPUs despite the shaky supply lines.
Intel, then, is being pulled one way and another by stock shortages and demands of a different kind on the price-cutting front. Meanwhile, the dominance of Ryzen 3000 desktop CPUs is making further demands in terms of the urgency for Intel to push out new 10th-gen Comet Lake processors – a further refinement of 14nm which, admittedly, are looking impressive from the recent leaks we’ve seen.
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