Shortages of Intel’s CPUs have persisted for well over a year now, but according to Dell, they actually got worse in the ongoing quarter because of unexpectedly high demand for client computers and servers. As a result, the company had to cut its revenue forecast for the fourth quarter as sales of its PCs were impacted by the tight supply.

Last week Intel issued a letter apologizing for CPU shipment delays because despite of the fact that it increased its 14 nm capacity by 25% year-over-year in 2019, demand still outpaced supply. Furthermore, Intel experienced production variability in the fourth quarter and because it had limited inventory buffers, it could not absorb the impact. Intel did not explain what variability meant in this case, but based on comments from Dell, it looks like Intel could not produce enough processors for commercial and premium system.

Here is what Jeffrey Clarke, COO of Dell, had to say:

“Intel CPU shortages have worsened quarter-over-quarter the shortages are now impacting our commercial PC and premium consumer PC Q4 forecasted shipments.”

Even though Intel’s supply and demand balance is not favorable to makers of systems, Dell’s PC business revenue was on the rise in Q3 increasing to $11.4 billion by 5% year-over-year. Sales of commercial PCs were up 9% to $8.3 billion, whereas shipments of consumer computers were up 6% to $3.1 billion.

It is particularly noteworthy that Dell remains cautious about Intel CPU supplies going forward, though it naturally does not make any actual predictions, but rather promises to monitor situation and adjust forecasts. Dell is not the first PC company that is cautious about Intel’s ability to meet demand as ASUS also expressed similar concerns earlier this month.

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Sources: Dell, Reuters

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  • eva02langley - Wednesday, November 27, 2019 - link

    Let's hope it get worst so stakeholders can give OEMs a major WAKEUP call.
  • yannigr2 - Thursday, November 28, 2019 - link

    Dell, don't worry.
    Just keep saying to yourselves: "There is no AMD".
  • s.yu - Thursday, November 28, 2019 - link

    With the projected contraction of the PC market Intel should probably be reluctant to invest in new fabs, even with the recent shortages.
  • eva02langley - Thursday, November 28, 2019 - link

    It was a typical economist reasoning decision (Swan). "Not enough capacity, let's build more factories"... not understanding competition is going to eat a good chunk of their deficit in capacity and their lack of competing products will drive the demand down. Also the fact those factory will take 2 years to built is just mind blowing.

    Intel is having too many markets however their bread and butter are CPUs. By not focusing on what they are the best, they are losing their edge and we see it now. I don't believe that intel can come back at this point if AMD keep executing like they are.
  • etre - Thursday, November 28, 2019 - link

    Intel has been on 14nm for some years now. How is that it has problems meeting demand ?
  • dlum - Thursday, November 28, 2019 - link

    Asking seriously?
    One quite commonly mentioned aspect is AMD competition caused to increase the average shipped number of cores per CPU considerably. So since years what Intel was shipping to most consumers were 2 and 4-core CPUs, while currently average core count increased to 4-6? max is around 8? That's around 2x increase.

    Intel mentioning multi-billion investments to increase production capacity by 25%, still when you increase your core count like by up to 100% - you just cannot deliver so many wafers more.
  • eva02langley - Thursday, November 28, 2019 - link

    I didn't thought about that, it is quite logical when you think about it.
  • Xyler94 - Thursday, November 28, 2019 - link

    Intel is in a bad spot due to AMD. Now I'm not talking about performance, I'm talking about manufacturing.

    Before Ryzen, Intel had a few manufacturing processes, which made chips for desktops, laptops, LCC servers, HCC servers, and XCC servers.

    Now, Intel has so many varying chip sizes, all needing 14nm space, that it cannot manufacture enough for the demand. Demand probably went up due to Intel finally having a processor worth upgrading too, thanks to Ryzen, but it's putting a big strain on their 14nm production having so many different products to manufacture. Intel is masking this as a demand problem, but it's more they can't manufacture that many different products, and Intel has only themselves to blame for having products that can't scale as well. That's where AMD got super smart. They can just order as many 7nm chiplets they need, then mate them to an IO die. What they mate it to is what the product will be. And how many they mate also. The modularity of AMD's design is a huge strength.
  • eva02langley - Thursday, November 28, 2019 - link

    Which I believe Intel will never surpass as long as they are producing monolithic chips.
  • Peskarik - Thursday, November 28, 2019 - link

    I am in Europe and I cannot buy an Ice Lake Lenovo X1 Carbon that I want. Generally I see no Ice Lake thin/light/long-battery laptops available on the market, bar Dell 13 2-in-1, which I do not want.

    I would buy an AMD-powered laptop but the battery life on them is shorter than on Intel-powered machines, therefore no buy.

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