View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. Leadership
  2. Digital Transformation
November 21, 2019updated 22 Nov 2019 12:40pm

Intel Turns to Foundries to Fix CPU Shipment Delays, as OEMs Fume

"We have not yet resolved this issue"

By CBR Staff Writer

Intel has apologised to customers for ongoing CPU shipment delays, telling partners “we appreciate [this] is creating significant challenges for your business” and admitting that supply-demand balance “remains a challenge”.

“Despite our best efforts, we have not yet resolved this challenge” (recent PC CPU shipment delays), Intel GM Michelle Johnston Holthaus said, in a letter that suggests it is giving customers revised shipment schedules for PC CPUs.

The letter of apology is just the latest in a drumbeat of regular apologies from Intel: “We’re letting our customers down” CEO Bob Swan said bluntly on an October earnings call of the issue, which first hit headlines in 2018.

Read this: Intel Growing “Gangbusters”: 5 Key Takeaways from its Q3s

Holthaus said Intel is doing all it can to ramp up production of its 14nm PC CPUs, amid growing OEM frustration, including “increasing our use of foundries” (something the company declined to specifically commit to in response to questions from analysts in a Q3 earnings call).

“In response to continued strong demand, we have invested record levels of Capex increasing our 14nm wafer capacity this year while also ramping 10nm production,” she said, adding that “in addition to expanding Intel’s own manufacturing capability, we are increasing our use of foundries to enable Intel’s differentiated manufacturing to produce more Intel CPU products.”

The capacity boost will let Intel increase its second-half PC CPU supply by double digits compared with the first half of this year, she said.

“[But] 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 has resulted in the shipment delays you are experiencing, which we appreciate is creating significant challenges for your business.”

Intel is speaking to customers directly amid freshly revised shipment schedules, the company admitted. Whether rivals like AMD can ramp up enough production to steal some of that frustrated demand, and OEM’s have enough contractual flexibility to do so should they wish is something of an open question: OEMs are no doubt thinking hard about diversifying more.

Is this affecting your business? Want to talk on or off the record about the issues? Get in touch with Computer Business Review.

Read this: AMD EPYC Rome Launch: The Specs, the Reaction to the new 7nm CPUs

 

Topics in this article: , , ,
Websites in our network
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU