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Intel addresses 14nm CPU supply struggles

Over the last few months, there has been plenty of talk surrounding Intel’s CPU shipment troubles, with 14nm processors hitting a supply issue. As part of an update to customers today, Intel has acknowledged the issue and is promising to improve supply-demand balance.

In a letter published this week, Intel Executive Vice President, Michelle Johnston Holthaus, acknowledged the recent supply issues and added that “despite our best efforts, we have not yet resolved this challenge”.

While boosting supply has taken longer than hoped, Intel says it has “invested record levels of Capex” increasing 14nm wafer capacity this year while also ramping 10nm production. Beyond investing more in Intel’s own manufacturing capabilities, the company has also increased its use of other foundries to produce more CPUs.

As Intel puts it, the added capacity has allowed a double-digit increase in CPU supply for the second half of the year compared to the first. However, sustained market growth offset that, leading to continued supply constraints:

“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 continued high demand has resulted in shipment delays, which will hopefully subside in the first half of 2020.

KitGuru Says: Intel’s 14nm processor supply issues have been well documented this year, while we don’t know when things will improve, Intel seems to be trying to spur things along, so we’ll have to wait and see.

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