Intel May Sacrifice Retail Supply to Please OEMs

Intel Will Prioritize OEM Shipments

Since the start of Q3 2018, Intel has been suffering from a major CPU shortage. Intel’s 14nm supply has been oversubscribed due to problems with 10nm. After admitting to the problem, the company promised to do more to fix the problem. Despite that, the company hasn’t been able to fix supply. Furthermore, it looks like the shortage will even get worse, especially for retail non-OEM customers.

According to some new reports, the company is changing the makeup of their supply. To placate the OEM partners, the company will be diverting additional supply to them. The extra supply will come from retail, meaning fewer units for consumers to buy directly. This means the DIY boxed retail units will likely cost more going into the holiday season. On top of already high prices, this may make Intel an unaffordable option for certain price points.

Retail CPUs May See Price Hike

The move to supply OEM firsts makes sense from the comapny’s perspective. The OEM long-term partnerships are more important for the company. Furthermore, there is already growing discontent among partners about the inability to supply enough chips. If the OEMs were to decide on a shift to using more AMD chips, it would be a strategic shift, hurting Intel in the long run. Sacrificing direct consumer sales is a small price to pay for long-term OEM dominance.

With more chips going to OEMs, they will have less to worry about. Some Intel partners have decided already to use AMD a bit more. However, the impact will be muted with this new strategy. For OEM customers, this should hopefully mean more stable pricing for Intel-based units during the holidays. However, for most DIY builders and those without a supply deal, AMD may very well turn out to be the better deal this winter.