Although Intel last year invested an additional $1.5 billion to increase its production to 14 nm, it seems that its procurement problems will not be solved until the second half of this year. The company admitted Thursday during its earnings conference call that supply difficulties will continue throughout the third quarter of the year.
"Wehave increased our ability to improve our position in the second half, although the product mix will continue to pose a challenge in the third quarter as our teams align the available supply with customer demand" said Robert Swan, CEO of Intel.
Due to the record demand for high-performance client servers and processors last year, Intel has encountered difficulties in meeting the demand for these products in 2018. As a result, the company had to invest 1.5 billion dollars in production tools to increase CPU and chipset production made using its 14 nm process technologies in Oregon, Arizona, Ireland and Israel.
For obvious financial reasons, Intel has prioritized the production of high-profile products such as Xeon or Core i7/i9 over the production of low-end products, such as Atom, Celeron or Pentium. It is expected that this practice will continue, so it will be a little easier to get a high-end part rather than an entry-level processor until at least the end of the third quarter.
Good news, however, is that Intel began production of its Ice Lake-U CPUs in the first quarter. And, thanks to its optimization of the factory network, the company can produce more of these processors than originally expected. 10 nm CPU volume production will reduce the capacity pressure of 14 nm and less demand for 14 nm mobile products. As a result, the bidding situation with Intel products made using 14 nm process technologies is likely to be better in the second half of 2019.