Intel CPUs are getting harder to find at retail, and prices are increasing across the channel. Intel has previously telegraphed that meeting demand for its chips could be a challenge in the back half of the year, and it looks like those restrictions are beginning to bite.
In July, during its Q2 conference call, CEO Robert Swan said: “We are seeing demand signals in supply feasibility to deliver on our revised expectations. Our biggest challenge in the second half will be meeting additional demand, and we are working intently with our customers and our factories to be prepared so we are not constraining our customers’ growth.”
There are a variety of factors that could be in play here. Intel ran out of H310 chipsets after launching them on a 14nm process earlier this year (previous chipsets were built on 22nm). Transitioning its chipset business to 14nm is part of Intel’s regular strategy to move its non-CPU hardware to older process nodes and keep fab utilization high, but it may have put more pressure on the company’s foundries thanks to — you guessed it — the delays to 10nm.
According to Intel, these delays are solely due to increased demand for its products. The company has adjusted its income expectations upwards by $4.5B since its January 2018 report on FY 2017. But remember — Intel originally planned to be in full production on 10nm by now. Instead, 10nm won’t ship until the tail end of 2019. And there’s simply no way around it — you have to dedicate fab space to new process nodes in order to install them, it takes months to install and bring up new tools (you can’t just jam all the 10nm equipment in at the last minute), and that means the continued 10nm delays are going to have capacity ramifications at Intel’s foundries. As THG notes, even major OEMs like Acer have publicly stated that Intel’s 14nm chips are in very tight supply.
That’s the downside to missing your roadmap when the roadmaps are drawn up 3-5 years in advance. There’s no way to untangle the impacts of that miss from the knock-on effects they cause down the chain. Delaying 10nm hurts EUV deployment. It also puts at least some degree of increased pressure on Intel’s fabs, which should be fully converted to 10nm by now and instead are continuing to build out on 14nm while fixing 10.
Keep all this in mind when considering the 9th Generation Core CPUs after they launch. Practical availability matters more than formal MSRP statements, and we’ll be considering the launch from that perspective as well when the day arrives. As for Intel’s availability crunch, it could cause some short-term sales loss to AMD in the retail channel, but Intel will presumably prioritize the most profitable orders and customers it has to keep cash flowing — and with an expected $70B in yearly sales this year, there’s plenty of cash in the pipeline.
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