Intel has issued an open letter apologizing to punters and partners alike for its inability to meet demand for processors.
The missive [PDF], penned by Michelle Johnston Holthaus, executive VP and general manager of Chipzilla's sales, marketing and communications group, says it still is struggling to get enough microprocessors out of its factories for desktop PCs.
Essentially, this confirms our previous reporting that Intel shortages are set to run into 2020, as the silicon slinger focuses on churning out high-margin, high-end Xeon server chips as a priority over low-margin desktop and small-server parts, and shifts assembly lines from 14nm processes to 10nm and 7nm. These effects have limited its ability to meet demand for personal-computer builders.
"Supply remains extremely tight in our PC business where we are operating with limited inventory buffers," Holthaus admits. "This makes us less able to absorb the impact of any production variability, which we have experienced in the quarter."
This as Chipzilla is looking to a holiday shopping season that is typically among the busiest times of year for PC vendors. The chip shortage, originally thought to end around the middle of the year, has dragged on well past that and, it now seems, will be continuing into the foreseeable future.
Without enough chips to meet demand, vendors have warned investors that their own revenues are being held down, a problem that will only become magnified as the holiday season plays out, and encouraged some system manufacturers to tout AMD Epyc and Ryzen processors as alternatives to Intel parts.
Analysts have estimated that Chipzilla's supply shortage has led to a roughly 7 or 8 per cent cut in expected PC shipments worldwide over recent months.
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Based on the letter, Intel does have a plan in place to increase production, both of 14 and 10nm chips architectures. Holthaus noted that the chip giant is pumping cash into building new factories.
"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 veep said.
"The added capacity allowed us to increase our second-half PC CPU supply by double digits compared with the first half of this year."
Still, Intel says it won't be able to catch up to the current demand, so it will be dispatching its representatives to tell PC makers exactly how many chips they will be able to send out, and where they will be falling short.
All of this could be good news for AMD, which announced strong sales and a series of deals with OEMs in its last financial results. ®