Intel CFO and interim CEO Bob Swan has announced that the chip giant will invest an additional US$1 billion in 2018 in expanding its 14nm manufacturing sites to address tight supply.
But sources from the upstream supply chain still believe Intel's chip shortages are still unlikely to be completely resolved by the end of 2018.
Swan admitted in an open letter that "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."
"We are investing a record US$15 billion in capital expenditures in 2018, up approximately US$1 billion from the beginning of the year," said Swan in the letter. "We're putting that US$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."
Supply chain sources noted that PC vendors will still manage to minimize the impacts of Intel's CPU shortages, as demand for PCs in the second half of 2018 is not growing as strong as expected. Many vendors still have inventory for older-generation PCs and have turned to AMD for their new mid-range to entry-level products.
Although Intel claimed that the shortages are the result of a significant increase in its CPU demand, the sources pointed out that the most important factor is Intel's delayed transition from 14nm and 10nm technologies.
With Intel's 10nm products unlikely to enter mass production until the fourth quarter of 2019 and the ongoing US-China trade war likely to place strong pressure on global PC and server markets, Intel is expected to face even more challenges in 2019, the sources added.
Intel to increase 14nm chip output
Photo: Digitimes file photo
Article translated by Joseph Tsai
