Intel Acknowledges CPU Supply Issues and Apologizes to its Partners in a Public Letter

Chipzilla is facing supply issues for quite a while now as they haven’t been able to keep up with demand. Intel stated earlier this year that supply issues will end by the second half of 2019, but this wasn’t the case and now the company has come out with a public apology for its CPU shipment delays.

This might not seem like a problem for most companies, having demand outstrip supply, but things aren’t so simple for Chipzilla. Many OEMs depend on Intel for their products and having to wait on shipments can hurt their bottom line. This definitely becomes a big problem when you have a very capable competitor (AMD) with a strong product lineup and Intel definitely wouldn’t want its buyers to look for alternatives.

Many OEMs have shown their displeasure as Intel has not only been able to keep up with demand but also made several changes to their roadmaps. Reports surfaced last year on how Microsoft and Intel’s relationships were strained over security issues on Intel CPUs. There has been an increasing influx of laptops with AMD CPUs on the market and recent news only dictates a winning hand for AMD here.

Intel is building new fabs all over the world and they are also going to use third-party fabs to manufacture 14nm products, but it doesn’t seem to solve immediate supply concerns and the issue will persist, possibly in the short-term.

The letter from Michelle Johnston Holthaus, Intel’s Executive Vice President General Manager, Sales, Marketing and Communications Group acknowledges the persistent supply issues and puts forward an apology to its OEMs and partners, although the letter doesn’t give a timeline on the solution. You can read the entirety of the letter below.

I’d like to acknowledge and sincerely apologize for the impact recent PC CPU shipment delays are having on your business and to thank you for your continued partnership. I also want to update you on our actions and investments to improve supply-demand balance and support you with performance-leading Intel products. Despite our best efforts, we have not yet resolved this challenge. 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. 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 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 has resulted in the shipment delays you are experiencing, which we appreciate is creating significant challenges for your business. Because the impact and revised shipment schedules vary, Intel representatives are reaching out with additional information and to answer your questions.

We will continue working tirelessly to provide you with Intel products to support your innovation and growth.

– Michelle Johnston Holthaus

Source – Intel Newsroom

Indranil Chowdhury
Indranil is a Med school student and an avid gamer. He puts his absolute faith in Lord Gaben and loves to write. Crazy about the Witcher lore, he plays soccer too. When not playing games or writing, you can find him on 9gag spreading the Pcmasterrace propaganda.