Intel CPU Shortage Could Worsen in Q2 2019, Opening Path for ARM, AMD

The CPU shortage that constrained Intel CPU sales and sent prices trending hire through the back of 2018 could continue to plague Intel through Q2 of this year. While the firm has taken steps to combat the problem, including launching new “KF” processors without integrated GPUs to improve yields, Intel may have been unable to fully address the issue.

Vendors like Dell, HP, and Lenovo saw a five percent gap in Q3 and Q4, the report said, while Taiwan-based vendors were hit by as much as a 10 percent gap between supply and demand. The laptop market as a whole is said to have experienced a 4-5 percent supply gap in Q4 2018. Apollo and Gemini Lake CPUs, from the Atom family, were the second-hardest hit group after the Core i5.

These shortfalls have supposedly helped fuel growth at AMD, which shared its own Q4 2018 market share figures back in February. This data, by Mercury Research, shows AMD at 3.2 percent of the server market (we discussed that claim in a separate article), 15.8 percent of the desktop space, and 12.1 percent of notebooks.

Supposedly AMD has gained further market share in mobile; DR reports 15.8 percent market share in Q1 2019, with expectations of 18 percent market share by Q2 2019 before declining again as the Intel shortage improves. Historically, mobile has been a tough nut for AMD to crack; the company’s now-settled 2005 lawsuit against Intel alleged that Intel had systemically abused its monopoly power to deny AMD shelf space and SKU wins in that segment in particular. AMD focused on low-power markets with its later Bulldozer architectures, but Kaveri, Carrizo, and Bristol Ridge never found much success in the segment.

Intel’s shortfall could open a window for ARM vendors as well, though that seems more likely in the Chromebook space than in Windows devices. Qualcomm is bringing more powerful SoCs to market to drive ARM products that will compete more effectively against x86, but this is a longer-term process and the current situation decisively favors AMD or Intel hardware. Intel will boost its production at multiple 14nm facilities, but DigiTimes doesn’t expect 14nm to see significant gains until July or August of this year. They predict a 14nm capacity expansion of 25 percent, which would resolve the issue once and for all.

One facet of the situation that isn’t very clear is how we should weigh this against the fact that many firms have said they believe the boom in data center sales (and the associated increase in Intel processor shipments) is more or less over. In Q4 2018, Intel reported just 9 percent growth in data center shipments, after three quarters of 24 percent, 27 percent, and 26 percent growth in the first three quarters of the year. Nvidia data center revenue grew 12 percent. Not bad, certainly, but not exactly rampaging increases, either. The typical impact of seasonality has undoubtedly ameliorated some of Intel’s issues, but any sustained drop-off in data center demand should have freed up some capacity on that front as well.

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