Wed, Oct 10, 2018 - Page 12 News List

Intel reallocating production to ease constraints

By Lisa Wang  /  Staff reporter

Intel Corp expects supply constraints of its processors to ease slightly next quarter as it is shifting some older-generation chipsets off 14-nanometer technology among multiple measures to increase capacity flexibility, a company executive said.

Such capacity rearrangements are being implemented alongside the chipmaker’s latest capacity expansion plan by allocating an extra budget of US$1 billion for 14-nanometer technology migration, the world’s biggest chipmaker said.

“We are moving some previous-generation chips to 22-nanometer [technology] to allay [tight supply of] 14-nanometer capacity as those lower-end products are usually made at high volumes,” Intel Microelectronics Asia LLC Taiwan Branch sales enabling manager Shane Yu (余孝倫) said.

Yu made the comments on the sidelines of a news conference debuting the chipmaker’s ninth-generation Core processors for desktop computers, Intel Core X-series processors for gaming PCs as well as the Xeon W-3175X processor.

Intel started moving production of lower-end chipsets, such as the H310 and Z310, to 22-nanometer technology in the third quarter to avoid a squeeze in 14-nanometer capacity for high-end processors, Yu said.

The extra 14-nanometer capacity would be prioritized for high-priced sever processors and then for Core processors, mostly for notebook computers, he added.

Based on this capacity allocation, “server processor supply should be OK, but supply of entry-level processors [for PCs] will be much tighter,” Yu said.

The chipmaker expects the supply crunch to continue in the fourth quarter, he said, but it expects the situation to improve slightly in the first quarter of next year.

The chipmaker also said it is making positive progress toward ramping up its 10-nanometer technology in the second half of next year.

That would help boost the company’s capacity flexibility as 10-nanometer capacity can be used to produce server and notebook processors, Yu said.

Intel attributed the ongoing supply constraints to stronger-than-expected PC demand this year, amid exuberant enterprise PC replacements and robust sales of gaming PCs.

“We have been seeing strong PC demand since the second quarter of this year, which is much stronger than our expectations ... at the beginning of the year,” Yu said.

Overall PC shipments are expected to grow at an annual rate of 1 percent this year, a reversal of a six-year downward spiral since 2011, he said.

Worldwide server shipments would also post double-digit percentage year-on-year growth this year, he said.

Server processors consume more wafers than PC processors due to their bigger sizes, he added.

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