Asus CEO: Intel 14nm CPU Shortage Has Affected Business

Asus CEO Jerry Shen says the company has seen shipments to the builder community, including motherboards, impacted by Intel's current CPU supply status, according to a report from DigiTimes today. Further, Shen expects the CPU shortage, especially for desktop CPUs, will continue into Q2 2019.

According to Shen, Asus' "operational visibility" for Q4 2018 is 20 percent, a steep drop to the over-50 percent recorded in unspecified previous years. He attributes this to the CPU shortage, as well as growing laptop competition in Europe and the U.S.-China trade war

Asus' net profits dropped in Q3 by 43 percent compared to the same period last year. For the first three quarters of 2018, the company saw a profit decline of 39 percent compared to the first three quarters of last year.

The company expects PC shipments for Q4 to remain flat compared to the previous quarter, even though you'd normally see significantly more sales in the Q4 compared to the Q3, thanks to holiday shopping. Components shipments are expected to drop 5 percent. 

Shen noted that server and gaming PC CPU shipments have stayed on track, so Asus' gaming PC business is yet to be affected by the shortage.

The Asus chief isn't the first to say he expects the CPU deficit to continue into 2019, with Martin Wong, CEO of ODM Compal Electronics, saying the same in September. Intel has been having troubles finalizing its 10nm process node, causing shortages in its 14nm processors that it expects to worsen in Q4. Intel even had to revert to the old 22nm chipset to be able to fulfill the demand.