Intel said on Friday it's taking steps to increase output and alleviate a chip shortage that threatens to slow the industry.
Intel said its data-centric businesses grew 25 percent through June, and cloud revenue grew a whopping 43 percent in the first six months. The performance of Intel's PC-centric business has also grown significantly, according to the company. Intel expects modest growth in the PC total addressable market (TAM) this year for the first time since 2011, driven by strong demand for gaming as well as commercial systems.
But the return to PC TAM growth has put pressure on Intel's factory network. So the company plans to prioritize the production of Intel Xeon and Intel Core processors. That said, supply is undoubtedly tight, particularly at the entry-level of the PC market.
To address this challenge, Intel is investing a record $15 billion in capital expenditures in 2018, up approximately $1 billion from the beginning of the year. Intel is putting that $1 billion into its 14nm manufacturing sites in Oregon, Arizona, Ireland and Israel.
Other technology companies including Micron Technology and Dell have pointed to a CPU shortage weighing on their revenue forecasts.
Intel also said that it is making progress with 10nm. Yields are improving and volume production is expected to start in 2019.