Intel acknowledges 14nm production problems, issues an open letter

Chit-chat across the board prompted Intel to address 14nm challenges its facing currently

Over the past week, there have been rumours about Intel facing 14nm manufacturing problem. There have been news reports where Intel’s 14nm processor demands significantly overshadow its supply, therefore the prices will increase. As a result, this would have affected RAM prices. So far, Intel never anything a word. But recently Interim CEO Bob Swam sent a letter via press release and newsletters. As many would imagine, this letter needed to assure both its customers, partners and also its investors.

Reason for the shortage and solution

Swan confirms its factory networks are facing pressure since Intel is prioritizing Xeon and Core series. As a result, this is creating supply issues for mid-end to entry-level CPUs. Over the $15 Billion spent by Intel this year, the company is investing an additional $1 Billion to boost production capacity in its 14nm fab units in Oregan, Arizona, Ireland and Israel.

He also talked about a 10nm production where he assures its yields are improving and should be ready for high volume production in 2019. At the end of the day, he says they want to make great products and deliver strong business results.

Unlike many press releases and letters, this is very clear. During Q2 2018, the PC shipments have increased worldwide for the first time since six years according to Gartner. Therefore, they are expecting a modest growth by the end of this year since 2011. As many of us expected, this is due to the strong demand for gaming and commercial systems (servers as one of them).

What about AMD??

While the investment should help Intel to boost production, there will be a gap wide enough for AMD gain momentum. It is predicted that AMD may benefit 30% increase in desktop market by the end of Q4 2018 because of Intel’s situation and Ryzen performance & supplies. OEM partners may plan to fill the shortage by allocating more of its systems towards AMD. Asustek, Micro-Star International, Gigabyte and ASRock have increased production and shipments for AMD platform, therefore increasing AMD’s market by 20% during this quarter. Therefore, an additional +10% in demand and sales by December is not a long shot.

This also affected share prices as AMD’s shares enjoyed a great growth for the first time in 12 years. Meanwhile, AMD will start producing EPYC processors Rome and Zen2 architecture is ready for volume products in 2019 by using 7nm process via TSMC.

The current best-selling CPUs

As top choices in Amazon US, both AMD and Intel SKUs are having a balanced sales Its interesting to see that the Intel Core i7-8700K and the Ryzen 7 2700X are the only unlocked CPUs in top 8 positions.

In a way, it shows the type of high-end and mid-end mainstream processors people are purchasing in the current times. There are a couple of Core i3/Ryzen 3 options people are purchasing. Its good to see both AMD and Intel are concentrating on the market. Competition is good since it also helps to increase market share and sales. While Intel acknowledges its enjoying growth, one can’t deny that competition also influences that growth for mutual benefit.

Here’s hoping the duopoly system stay healthy for each other’s benefits- and ours!

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