Intel Supply in Q4: “Output Capacity up, Supply-Demand Still High”
by Dr. Ian Cutress on September 26, 2019 5:05 AM EST
Recent reports from media outlet Digitimes have stated that Intel’s high demand issue, and its inability to fully supply that demand, will continue into Q4. The report states that Intel’s OEM partners and the supply chain are still short of the supply they are requesting from Intel and its distribution network. We reached out to Intel for comments.
Intel’s high demand has been of particular note since mid-2018. Since the discovery of hardware vulnerabilities such as Spectre and Meltdown, and the fixes that reduced overall performance of a large number of the installed server base, many of Intel customers have been increasing the size of their server deployments in order to re-match their original capacity. This issue caused a sharp up-tick in demand of Intel processors, and Intel has driven newer architectures that try to minimise those performance deficits (with an overall performance uplift when the new architecture is factored in). As a result, Intel moved some of its fabrication capacity away from its future 10nm process and back onto its 14nm in order to meet demand.
The consequence of this is record revenues for Intel – the company shifted a lot of production into its high core count and high-cost parts. The CEO of Intel, Bob Swan, addressed the issue in its recent financial update:
“We're also making steady progress increasing CPU supply. Through our investments, focused execution and tighter customer collaboration, we expect our PC CPU supply will be up mid single-digits this year while we expect the PC TAM to grow slightly. We'll continue to work with our customers to meet their required product mix and ramp additional capacity to ensure we are not a constraint on their growth. [] We lost a little bit of share in the second quarter, particularly in CSG at the lower end small core primarily due to supply constraints. So -- and our expectation is that we'll begin to work our way back in the second half of the year given the capacity we've put in place to have more supply and meet our customers' demands.”
The recent report from Digitimes seems to put some cold water on Intel being able to meet all of its 14nm CPU demand by the end of 2019. With the recent launch of Comet Lake in the mobile space, Cascade Lake in the enterprise and workstation space, and the future launches of similar product lines, users and Intel’s partners are expecting a strong supply of CPUs with the generational update.
We reached out to Intel to see if there was any update to Digitimes’ commentary. An Intel spokesperson stated:
“We continue working to improve the supply-demand balance for our PC customers. In the first half of 2019, we saw PC customer demand that exceeded our expectations and surpassed third-party forecasts. We have added 14nm output capacity and are ramping volume on 10nm with systems on shelf for holiday. While our output capacity is increasing, we remain in a challenging supply-demand environment in our PC-centric business. We are actively working to address this challenge, and we continue to prioritize available output toward the newest generation Intel® Core™ i5, i7 and i9 products that support our customers’ high-growth segments.”
This essentially partially confirms Digitimes’ report. While Intel is increasing its output capacity, with a focus on 10nm as well (Intel reports two fabs on 10nm at this time), the focus on 14nm will be on high-growth segments, which for Q4 is likely to remain the high-end processors. Partners looking at Core i3 and lower performance cores might have to extend their lead-times for CPU supply yet again. It will be interesting to see when Intel will be able to re-reach parity between demand and supply.
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Maxiking - Thursday, September 26, 2019 - link
it does show* stupid autocorrectduploxxx - Thursday, September 26, 2019 - link
care to choose?a cpu that has security issues in every way, way more expensive and without a decent cooler can't hold turbo, or if decent expensive cooler consumes above TDP
or a cpu that is out of the box faster even with less specced turbo as the reviews do not require the best coolers for bias results. less expensive, way more performing out of the box but does not turbo all cores according the information in the spec sheets. where turbo is off by 25-50mhz....
extide - Thursday, September 26, 2019 - link
Honestly AMD chips are FAR more temperature sensitive to turbo than Intel ones, and they BOTH use more than TDP at turbo. Just saying...lemans24 - Thursday, September 26, 2019 - link
so please explain how Intel's revenue continues to go up as they try to satisfy current demand for 14nm based chips??Intel999 - Thursday, September 26, 2019 - link
Intel's revenue is down a little over 1% through the end of June. In the most recent quarter revenue was down over 3%.It is likely the quarter that ends this month will be down another 4 to 5%.
Intel's revenues are not going up.
Klimax - Friday, September 27, 2019 - link
Ehm, faster in some benchmarks (reminder: Intel and AMD optimized their memory controllers very differently - latency vs. bandwidth)And one cannot say AMD chips don't have security issues - none reported doesn't equal none exists, it just means they are not under such scrutiny.
brakdoo - Thursday, September 26, 2019 - link
You mean just one(or two if you want to include 3900x) product that makes up a very small part of the market? Is that really shifting supply/demand ratio for the whole CPU market.I'm sure AMD didn't expect that so many people want to buy $500/$750 CPUs (who did ?).
BurntMyBacon - Thursday, September 26, 2019 - link
In the context of this threat:Faulty - Product that doesn't work as designed
Flawed - Product that works as designed, but the design has critical issues that affect usability.
I'm not sure why this issue was brought up. The impact level of the faulty AMD SKU(s) is not even close to comparable with the flawed Intel Architecture. I would not expect a large impact to AMD's revenue stream due to a problem affecting a small subset of users purchasing one or two SKUs (some enthusiasts purchasing one or two retail processor SKUs). I would expect a sizable impact from a design flaw that affected the majority of processors that Intel was making at the time. Granted some of the hardware issues also affected AMD products, but to a lesser extent. That all said, both companies seem to be selling as much as they can produce. So it would appear, at least for the moment, that neither issue is affecting current sales.
Korguz - Thursday, September 26, 2019 - link
ahh maxiking, your amd hatred is still as strong as ever, huh ? still in love with intel too :-) you must be related to some one else on here that also has the SAME mindset. but hey, if you want to go with a company that lies about how much power its cpu's really use, and like duploxxx mentioned, security issues coming out of their butt, that's your choice, just like its every one else's choice to go with amd. extide, but not as much as intel uses.Yojimbo - Thursday, September 26, 2019 - link
You're missing some important considerations. Intel's customers already have Intel systems. They understand and have optimized for the systems. If they buy some extra compute capacity to make up for lost performance then it is cheaper to stay with the architecture they already have and have already tested then it is to jump into orders with a new architecture.