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ASUS Comments on Intel Shortages, U.S.-China Trade War

ASUS this week released its financial results for the third quarter of the year, and in the process issued comments regarding two pressing issues: shortages of Intel’s chipsets and processors, as well as the ongoing trade dispute between the U.S. and China. As it turns out, the situation is tough in both cases: tight supply will persist for quarters, whereas the trade feud may force ASUS and other companies to relocate its production facilities from China to other countries.

As reported, high demand for high-profile products has increased pressure on Intel’s factory network and forced the chipmaker to prioritize fabrication of its high-margin large-die Core and Xeon CPUs over other products in the recent months. Consequently, shipments of entry-level products made using 14 nm process technology are tight right now. In a bid to tackle the problem, Intel is in the process of allocating $1 billion to boost production of chips at its manufacturing facilities located in Oregon, Arizona, Ireland, and Israel. Meanwhile, it takes months to install new equipment into fabs, so any new step-and-scan tools acquired this quarter will unlikely have any impact on fab throughput until end of Q1 next year. ASUS certainly knows about that and admits that it expects tight supply to persist till Q2 or Q3 2019.

“We cannot answer on behalf of Intel,” said Jerry Shen, chief executive ASUS during the company’s earnings conference. “For example, data center will be the priority for Intel shipments, but priority is something we cannot answer on behalf of Intel. The shortage will affect component levels the most, such as the motherboard. Currently we believe that this will not be resolved before the Q2 of next year. Perhaps, it will be resolved in Q3 of next year. So, from now to next year we face many uncertainties in terms of CPU shortages.”

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