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takyon writes:

Intel Issues Update on 14nm Shortage, Invests $1B Into Fab Sites (Update)

Intel's CFO and interim CEO Bob Swan penned an open letter to its customers and partners today outlining the steps it is taking to address a persistent and worsening shortage of 14nm processors.

[...] The shortage impacts nearly every aspect of Intel's business, from desktops to laptops, servers and even chipsets, so Intel is making the sound business decision to prioritize high-margin products. The firm has also expanded its testing capacity by diverting some work to a facility in Vietnam.

[...] Intel's statement also assures us that processors built on its 10nm fabrication will arrive in volume in 2019. Intel had previously stated that 10nm processors would be available in 2019, but hadn't made the distinction that they would arrive in volume. That's a positive sign, as the oft-delayed 10nm production is surely a contributing factor to the shortage. Intel also cites the booming desktop PC market, which has outstripped the company's original estimates earlier this year, as a catalyst.

In either case, Intel concedes that "supply is undoubtedly tight, particularly in the entry-level of the PC market" but doesn't provide a firm timeline for when the processors will become fully available. Intel's letter also touts its $1 billion investment in 14nm fabs this year, but half of that capital expenditure was scheduled prior to its first public acknowledgement of the shortage. Given Intel's foresight into the production challenges, the prior $500 million investment was likely in response to the increases in demand and looming production shortfall.

Previously: Intel Migrates New Chipsets to "22nm" Node From "14nm"

Related: Intel's "Tick-Tock" Strategy Stalls, 10nm Chips Delayed
Intel's First 8th Generation Processors Are Just Updated 7th Generation Chips
Intel Delays Mass Production Of 10 nm CPUs To 2019

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