Intel 14nm Processor shortages continue until mid-2019 (+ Open letter Update)

We've addressed this topic a number of times already, with the problems at 10nm, Intel is running out of fabrication space on 14nm, and they have a lot of processors and chipsets on that node. The fabrication shortage at 14nm means fewer processors fabricated, resulting in processors shortages on a global scale. And that drives up prices.

A few days ago we already reported that the current Coffee lake (Core 8000 series) is currently suffering from increased prices, some procs even have risen 40 to 60% in price, overall for the higher end product it's 15 to 25% of an increase. The news on this keeps piling up as Compal (the company who fabs laptops for Acer, Apple, Dell, HP and Lenovo) has mentioned that these shortages are likely to last way into mid-2019, and that is a mighty long time.

Intel now has moved back chipset fabrication of for example the H310C chipset back to 22nm, just to free up space at 14nm. Intel also outsourced some production towards TSMC. The problems now also have moved into he data-centers, as 14nm Xeons and respective chipsets are facing shortages as well. Basically the shortages are not solely the effect of issues on the 10nm node, worldwide higher demand for chips is the main cause, and in fact maybe even a luxury problem for Intel. Intel also has extended desktop processors in 14nm, for example, the pending Core 9000 series will also be based on the very same 14nm fabrication node. Intel is simply sitting at this 14nm process longer than it expected as well, btw 10nm production has been postponed until the end of 2019.

Weirdly enough this all is still good news for Intel, as they can sell as much as they can deliver. It's just on the consumer and business side that due to these shortages, prices go up.

To our customers and partners,

The first half of this year showed remarkable growth for our industry. I want to take a moment to recap where we’ve been, offer our sincere thanks and acknowledge the work underway to support you with performance-leading Intel products to help you innovate.

First, the situation … The continued explosion of data and the need to process, store, analyze and share it is driving industry innovation and incredible demand for computing performance in the cloud, the network and the enterprise. In fact, our data-centric businesses grew 25 percent through June, and cloud revenue grew a whopping 43 percent in the first six months. The performance of our PC-centric business has been even more surprising. Together as an industry, our products are convincing buyers it’s time to upgrade to a new PC. For example, second-quarter PC shipments grew globally for the first time in six years, according to Gartner. We now expect modest growth in the PC total addressable market (TAM) this year for the first time since 2011, driven by strong demand for gaming as well as commercial systems – a segment where you and your customers trust and count on Intel.

We are thrilled that in an increasingly competitive market, you keep choosing Intel. Thank you.

Now for the challenge… The surprising return to PC TAM growth has put pressure on our factory network. We’re prioritizing the production of Intel® Xeon® and Intel® Core™ processors so that collectively we can serve the high-performance segments of the market. That said, supply is undoubtedly tight, particularly at the entry-level of the PC market. We continue to believe we will have at least the supply to meet the full-year revenue outlook we announced in July, which was $4.5 billion higher than our January expectations.

To address this challenge, we’re taking the following actions:

We are investing a record $15 billion in capital expenditures in 2018, up approximately $1 billion from the beginning of the year. We’re putting that $1 billion into our 14nm manufacturing sites in Oregon, Arizona, Ireland, and Israel. This capital along with other efficiencies is increasing our supply to respond to your increased demand.

We’re making progress with 10nm. Yields are improving and we continue to expect volume production in 2019.

We are taking a customer-first approach. We’re working with your teams to align demand with available supply. You can expect us to stay close, listen, partner and keep you informed.

The actions we are taking have put us on a path of continuous improvement. At the end of the day, we want to help you make great products and deliver strong business results. Many of you have been longtime Intel customers and partners, and you have seen us at our best when we are solving problems.

Sincerely,

Bob Swan
Intel Corporation CFO and Interim CEO

fantaskarsef
Senior Member

Posts: 14169
Joined: 2014-07-21

#5590680 Posted on: 10/01/2018 07:52 AM

Guess it's a new trend to create shortages and sell for more.

This. Been posting this in many other threads too, they're just circle jerking.
Even better, on kitguru.net I was reading this headline:

Intel addresses 14nm chip supply shortage, assuring it will meet full-year revenue outlook"

F U Intel, F the fing F U

AlmondMan
Senior Member

Posts: 986
Joined: 2007-09-03

#5590704 Posted on: 10/01/2018 09:54 AM

Is this impacting previous gen CPUs? Like, we're having major delays in shipments from HP, but we use laptops that run the 6000 series chips mainly. But those are 14nm... I'm just wondering how it all works, because the 6000 series are old, but many businesses still need them.

storm83
Junior Member

Posts: 12
Joined: 2018-02-08

#5590716 Posted on: 10/01/2018 10:47 AM

I really hope AMD is able to up their game for the true Ryzen 2!
It's time for some real competition...

Would be nice if AMD's gpu's were a threat to Nvidia as well, but i don't see that happening any time soon...

Fox2232
Senior Member

Posts: 11808
Joined: 2012-07-20

#5590783 Posted on: 10/01/2018 03:22 PM

-Tj-
Senior Member

Posts: 17811
Joined: 2012-05-18

#5590806 Posted on: 10/01/2018 04:11 PM

I've read its only budget cpus (Pentium, celeron?) that have this shortage and price hike, not Core and Xeon series - they've given priority to these instead.