Intel 14nm shortage could hurt Q4 2018 PC sales by as much as 7 percent

JP Morgan analysts predict the worsening shortage of 14nm chips from Intel will have a significant impact on fourth-quarter PC sales. Analyst Gokul Hariharan had talks with sources at PC vendors and got to hear that while the impact in Q3 2018 was small, it's expected to progressively worsen and have maximum impact in Q4 2018.

The shortage of Intel's 14nm processors and chipsets could hurt fourth-quarter PC sales by up to 5-7 percent. This is expected to benefit AMD.

“Our conversations with PC vendors indicate that the shortage, which started in small magnitude in 3Q, has been progressively worsening and is likely to have the maximum impact in 4Q18,” the firm’s Asia-Pacific technology analyst, Gokul Hariharan, said in a note to clients Friday. “We expect this to affect both notebook and desktop PCs and likely to have a higher impact on commercial and high-end consumer PCs, where using AMD or older Intel family of CPUs as substitutes are more difficult. ”

Hariharan believes part of the reason of the shortage may be that Intel already converted some of its 14nm production capacity to 10nm. As you probably know by now, Intel's 10nm process was supposed to be ready years ago, but at the moment the process is still broken. Without the ability to achieve good yields on the 10nm node, Intel is forced to stick to 14nm.