Over a year later, Intel's CPU shortage is expected to last "another quarter or two"

onetheycallEric

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Last April, Intel warned that its CPU shortage -- which kicked off in August 2018 -- would persist until Q3, with subsequent reports signaling that the 14nm CPU drought could ease up by June. Fast forward to Q4, over a year removed from the start of Intel's supply woes, and the shortage is expected to persist for at least one or two more quarters.

The Register reports that executives from HP and Lenovo were on hand at the Canalys Channels Forum in Barcelona, where they both mused and speculated on the ongoing CPU shortage. Alex Cho, HP Personal Systems Business president, stated that Intel's shortage isn't limited to specific SKUs, but rather its entire portfolio. Cho continued: "No surprise that it's been a hard year, it makes life more complex and expect it to continue for another quarter or two."

Gianfranco Lanci, Lenovo COO, cited the current lackluster growth in the PC segment and blamed it squarely on Intel -- a sentiment both IDC and Gartner seem to share. Lanci claimed the market could've grown by 7% or 8%, rather than the ~4% recorded.

Lanci also went on to speculate as to why Intel hasn't rectified the shortage. From Lanci's vantage point, the problem can be attributed to either production issues, or an underlying, intrinsic architecture issue with the processors themselves.

"The interesting thing is the PC vendors do not know, they have no better information than we have. There is no sign of a short-term fix."

However, it seems that everyone is in a state of conjecture, as Intel has remained tight-lipped on the continued shortage. Steve Brazier, CEO of Canalys, stated that the "short answer is that we don't know. And they are not telling anybody, so nobody completely knows why. All we can do is speculate that they made a serious software design flaw." Brazier went on to say that "The interesting thing is the PC vendors do not know, they have no better information than we have. There is no sign of a short-term fix."

Earlier this year, Intel CEO Robert Swan addressed the ongoing shortage with customers, vowing to "never again to be a constraint" on customer growth. However, the recent comments from HP, Lenovo, and Canalys seem to paint a different picture.

In response to inquiries from the press, Intel issued the following statement:

"We continue working to improve the supply-demand balance for our PC customers. We invested an added $1bn in capital to achieve more capacity and flexible supply. As a result, we increased our 14nm capacity by 25 per cent while also ramping 10nm production. We've improved our supply every quarter. However, in the first half of 2019 we saw PC customer demand that exceeded our expectations and surpassed third-party forecasts. We are actively working to address the supply-demand challenge, and we expect supply in the second half will be up compared to the first half. We continue to prioritise available output toward the newest generation Intel Core products that support our customers' high-growth segments, and we plan to further increase our output capacity in 2020."

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Irata

TS Addict
OEM can really only blame themselves - there's been a viable alternative since 2017 that they - for whatever reason - chose not to embrace.

So complaining that it's Intel's fault that they are losing sales is dishonest and hypocritical. What did they expect ? To play in the mud without getting dirty?
 

hahahanoobs

TS Evangelist
OEM can really only blame themselves - there's been a viable alternative since 2017 that they - for whatever reason - chose not to embrace.

So complaining that it's Intel's fault that they are losing sales is dishonest and hypocritical. What did they expect ? To play in the mud without getting dirty?
Reasons OEM's held back...
2 years isn't enough time to go from almost non-existent, to competitive. Businesses aren't consumers!
Launch issues with BIOS and memory and ratios
Not enough SKU's (won't hit enough markets/price points)
Not enough supply of current SKU's (3900X was missing)
Performance?
Cooling?
Demand?
 
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Uncle Al

TS Evangelist
Whewwwww ..... glad I sold that stock .... looks like I better hold off a little longer before buying it back!
 

Irata

TS Addict
Reasons OEM's held back...
2 years isn't enough time to go from almost non-existent, to competitive. Businesses aren't consumers!
I agree there is a difference, however Ryzen first came to market two and a half years ago and was most likely available to OEM / system integrators even before that.

Now, OEM could have waited to see how well Ryzen 1 does first, but that still gave them enough time, so I do not really see "time" as an excuse.

Launch issues with BIOS and memory and ratios
I do not dispute that AMD launches can be a beta fest at time, but wasn't the memory issue a problem with Ryzen 1 only ?
Also, memory should not be an issue for OEM in the first place as they will pick the memory that works with their PC.

And you are conveniently forgetting the various security issues with Intel chips in the last few years.

Not enough SKU's (won't hit enough markets/price points)
Not enough supply of current SKU's (3900X was missing)
Bringing up "supply" in an article that is about Intel's ongoing long time supply issues is a bit....special.
Also, for the APU used for most office type PC, there do not seem to be any supply issues, same for sub 3900x Ryzen.

While I doubt AMD could meet all OEMs' entire CPU needs, I am quite positive that they could provide enough to cover a nice part (e.g. the sales they complain about losing).


Performance?
Cooling?
What would the performance and cooling problems be exactly ? We are long past the "low performance and high power use" that Bulldozer APU had, and even those could be cooled well in office PC.

It is difficult to gauge demand if you are not actively selling something. And with actively, I mean offer good systems in the first place, have them available and visible in your store and try to sell them.

Checked Lenovo's small business desktop web site and compared the headlines they are using for the Think Centre M725s (AMD) vs. M920SFF (Intel) - two basically identical systems.

AMD / Intel:
"Keep your IT team happy" / "Perfect for users, even better for IT managers"
"Check off your to-do list" / "Experience real power, enjoy real results"
"Secure your data" / "Our most advanced security features"
"Enjoy a clean, sleek look" / "One well-connected, high-speed PC"

So, which of the two do you think Lenovo wants to sell ?



 
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Bp968

TS Booster
I wonder if intel has simply been hitting the limits of their 14nm process and the latest "generation" have each required more and more aggressive processor binning.

I also wonder if they are having trouble with 10nm in other ways. It would be embarrassing to release a 10nm product that was slower than their 14nm process, but each time they update the 14nm process the move the goal post 10nm needs to meet.