Intel CPU Shortages Expected to Continue Through Q2 2019

Supply Problem Persists Analysts Suggest

In case you think Intel CPUs are in short supply now, the problem is apparently only going to get worse. This is according to analysts at DigiTimes Research who expect Intel CPUs’ supply gap to grow 1-2pp sequentially in the second quarter of 2019. Worse, with the overall shipments unlikely to see much growth.

This Intel CPU shortage has been going on since summer last year and so far has defied market expectations. Analysts originally believe that shortages would gradually ease after vendors completed their inventory preparations for the year-end holidays.

Intel’s Loss is AMD’s Gain

In Q1 2019, Core i5 Coffee Lake CPUs are having the worst supply shortfall. To compensate for this, system manufacturers have turned to i3, and even much lower powered Atom CPUs. This is also causing tighter supply in the retail market.

One company which has been benefiting from this is AMD. Their share of notebook shipments has grown from 9.8% in Q1 2018 to 15.8% in Q1 2019. Manufacturers are even turning to AMD for powering Chromebooks.

What is Intel Doing to Solve This Problem?

Much of the strain is due to Intel stuck in the 14nm manufacturing and delay of 10nm. However, they have new 14nm capacity join production in the second half of 2019. Their existing 14nm fabrications are mainly in the US and Ireland, with a new expansion in Arizona. Volume production in this facility for 14nm is expected to ramp up around July, bringing production up by 25%.

Intel has also promised 10nm Ice Lake to being mass production in 2H 2019. However, many analysts believe that this is far from ready and we will most likely see further delays before it actually arrives. It is also possible for Intel to ship it entirely and divert focus on 7nm production.

Competitor AMD on the other hand is expected to unveil their 7nm Ryzen 2 line soon as well. Further putting pressure on Intel.