Compal warns of ongoing Intel parts shortage

September 28, 2018 | 10:54

Tags: #core #financial #intel-shortage #laptop #notebook #processor-shortage #shortage #supply-and-demand #xeon

Companies: #acer #compal #intel #inventec #quanta #wistron

Original design manufacturer (ODM) Compal has warned that shortages of selected Intel processors may continue until the second half of 2019, pushing prices up - and claims Intel is keeping its customers in the dark.

Rumours that Intel has been struggling to produce enough processors to meet demand circled for some time before being confirmed in a TrendForce report earlier this month. Now, the company's customers are starting to speak up on the matter - starting with original design manufacturer (ODM) Compal Electronics.

During a speech quoted by Taiwanese technology site DigiTimes, an outlet known for its own contributions to the rumour mill but whose article directly quotes the man, Compal president and chief executive Martin Wong confirmed that there are indeed shortages of Intel processors in the market, and that said shortages may not be resolved until the second half of 2019 - a delay big enough to impact laptop shipments for the traditionally-lucrative winter period.

Wong told attendees that Intel's communications on the matter have been lacking, claiming that the company has not provided 'a clear schedule' towards supply finally meeting demand. The company is also concentrating on its high-end Xeon and Core family processors, leaving those building systems for the lower end of the market bereft.

Other ODMs and original equipment manufacturers (OEMs) named as confirming the impact of the shortages include ODMs Inventec, Quanta, and Wistron, which has cut its shipment forecasts from 5-10 percent to sub-five percent, and Acer, which has stated that the shortages are impacting the whole market rather than individual brands.

Intel has not yet provided public commentary on the shortage but is known to be shifting production of some chipset models to previous-generation process nodes in order to free up production capacity for processors.

UPDATE, 1900:

Intel chief financial officer and interim chief executive officer Bob Swan has broken the company's silence to confirm the supply issues. 'The surprising return to PC TAM [Total Addressable Market] growth has put pressure on our factory network. We’re prioritising the production of Intel Xeon and Intel Core processors so that collectively we can serve the high-performance segments of the market,' Swan writes in an open letter posted to the company's newsroom site. 'That said, 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, which was $4.5 billion higher than our January expectations.'

To address the shortages, Swan has outlined a plan that will see Intel adding a further $1 billion into its 14nm manufacturing facilities in Oregon, Arizona, Ireland, and Israel, while claiming that the company is 'making progress' with its years-delayed 10nm node with improving yields and a plan to hit volume production some time next year - which would ease pressure on the company's overstretched 14nm node.

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