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What happened?

August 2018 – Unexpected consumer demand outpaces Intel’s factory network capabilities. In response, Intel orders prioritization of its Xeon and Core processors to continue serving the high-performance market. An additional $1 billion are channeled into its 14nm factories, and the corporation remains confident it has enough supply to meet its full-year revenue outlook.

“Supply is expected to remain tight, particularly for the entry-level PC market,” said Interim CEO Bob Swan in an open letter to consumers/partners.

January 2019 – Contrary to Intel’s earlier projections, the entry-level market continues to suffer a supply shortage of low-end CPUs. The company is forced to reassess its previous projections, as Q4 of 2018 shows no change in supply from the previous quarter.

“Our expectation is, working with our customers, that we will be through the supply constraints as we exit the second quarter of the year,” Swan said on a Q4 earnings call.

Forecast for The Future

March 2019 – New projections show CPU supply shortage will worsen before it improves. As demand for low-end CPUs increases, supply gaps may grow 1-2% in Q2 of 2019. Swan assures customers that by the end of Q2 Intel should be producing enough 14nm parts to resolve the shortage. Despite assurances, manufacturers are now turning to competitor AMD for processors. Meanwhile, contracted vendors and customers will continue to feel the pain of the supply shortage.