Intel has published a letter to its customers and partners apologizing for ongoing CPU shipment delays.
The letter, from Intel’s EVP and GM of Sales, Marketing and Communications, Michelle Johnston Holthaus, addresses the ongoing supply shortage, with Intel acknowledging the difficulties it has created for its customers, as well as updating customers on their efforts to boost chip production. Intel is also informing customers that the current supply shortages still haven’t been resolved.
Intel has been unable to supply enough CPUs to meet customer demands. The company has just recently shtarted shipping 10nm chips and has brought online additional 14nm fab capacity, boosting overall 14nm capacity by 25%. However, the supply issue remains.
Below is the letter:
To our customers and partners,I’d like to acknowledge and sincerely apologize for the impact recent PC CPU shipment delays are having on your business and to thank you for your continued partnership. I also want to update you on our actions and investments to improve supply-demand balance and support you with performance-leading Intel products. Despite our best efforts, we have not yet resolved this challenge.
In response to continued strong demand, we have invested record levels of Capex increasing our 14nm wafer capacity this year while also ramping 10nm production. In addition to expanding Intel’s own manufacturing capability, we are increasing our use of foundries to enable Intel’s differentiated manufacturing to produce more Intel CPU products.
The added capacity allowed us to increase oursecond-half PC CPU supplyby double digits compared with the first half of this year. However, sustained market growth in 2019 has outpaced our efforts and exceeded third-party forecasts. Supply remains extremely tight in our PC business where we are operating with limited inventory buffers. This makes us less able to absorb the impact of any production variability, which we have experienced in the quarter. This has resulted in the shipment delays you are experiencing, which we appreciate is creating significant challenges for your business. Because the impact and revised shipment schedules vary, Intel representatives are reaching out with additional information and to answer your questions.
We will continue working tirelessly to provide you with Intel products to support your innovation and growth.
Michelle Johnston Holthaus, Executive Vice President General Manager, Sales, Marketing and Communications Group