HP, Lenovo Lament Intel's Persistent CPU Shortage (Updated)

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Update, 10/18/2019, 2:36pm PT: Intel responded to our queries about its supply issues, and issued the following statement to Tom's Hardware:

"We continue working to improve the supply-demand balance for our PC customers. We invested an added $1 billion in capital to achieve more capacity and flexible supply. As a result, we increased our 14nm capacity by 25% 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 prioritize 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."

Original Article: 

Intel in April said its CPU shortage would end in the second half of 2019, but that doesn't appear to be the case, because reports indicate that neither PC manufacturers nor server makers can buy enough 14nm processors to keep up with demand.

The Register reported this morning that HP and Lenovo executives openly discussed the ongoing shortage at the Canalys Channels Forum in Barcelona. HP Personal Systems Business president Alex Cho reportedly said that it's "no surprise that it's been a hard year" because the processor shortage "makes life more complex." He also said the shortage affects Intel's entire product portfolio, not specific processors, and that people can "expect it to continue for another quarter or two."

Lenovo COO Gianfranco Lanci was said to have blamed the continued scarcity of Intel's processors for inhibiting the PC market's growth over the last quarter. The market grew around 4%, but Lanci said it could've grown 7-8%. Lanci also said the shortage resulted either from production issues that Intel should've resolved by now or from an underlying problem with the company's processor architecture that "is unpredictable." Either way, Lenovo's clearly not happy about the situation.

Server makers are said to be faring better. It's no secret that Intel has focused much of its 14nm production on its Xeon line chips meant for its enterprise customers rather than lower-end CPUs destined for PCs. DigiTimes reported yesterday that server makers have "seen the supply of Intel's 14nm CPUs become tight," although it's still "sufficient to support their shipments in the fourth quarter." Even the companies on which Intel's focusing are worried about getting enough CPUs.

Perhaps the most frustrating thing for manufacturers is that Intel has reportedly stayed tight-lipped about what's causing this shortage. Canalys CEO Steve Brazier told The Register that Intel is "not telling anybody, so nobody completely knows why" the company's  processors are so hard to come by over a year after the shortage began. 

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

Intel CEO Robert Swan said in July that he apologized to manufacturers earlier this year and "committed never again to be a constraint" on their businesses. Yet, the comments from HP and Lenovo indicate that Intel has in fact remained the constraining factor on their growth. We doubt the blame lies solely with the processor shortage--consumers have also purchased fewer smartphones and other devices over the last year--but it's clear that Intel's supply issues remain a factor.

Nathaniel Mott
Freelance News & Features Writer

Nathaniel Mott is a freelance news and features writer for Tom's Hardware US, covering breaking news, security, and the silliest aspects of the tech industry.

  • gggplaya
    Sure, we believe you Intel. Has nothing to do with lower yields due to making higher core count monolithic CPU's in response to AMD on both the the desktop and server markets.