Intel underestimated demand, will soon have 3 fabs running 10nm

During the company's third quarter earning call, Intel CEO Bob Swan admitted that the company underestimated demand. The market is stronger than forecasted back in Q2 and Intel hasn't been able to provide its customers with enough chips. Swan also noted that they're doing 10nm volume production in Israel and Oregon, and that 10nm will also soon be online in Arizona:

We expect our second-half PC client supply will be up double-digits compared to the first-half. And we expect to further increase our PC client supply by mid-to-high single-digits in 2020. But that growth hasn't been sufficient.

We're letting our customers down. And they're expecting more from us. PC demand has exceeded our expectations and surpassed third-party forecasts. We now think the market is stronger than we forecasted back in Q2, which has made building inventory buffers difficult. We are working hard to regain supply demand balance. But we expect to continue to be challenged in the fourth quarter.

Our manufacturing process node execution is also improving. We have Fabs and Oregon in Israel and volume production on 10-nanometer and will soon start 10-nanometer production in Arizona. Yields are improving ahead of expectations for both client and data center products.

Swan also reiterated that Intel is trying to move back to a two to two-and-a-half year cadence for its processor technology at least for the next few nodes. The company suffered huge setbacks on 10nm but believes it will be able to launch its first 7nm products in Q4 2021. The first 7nm product will be a datacenter focused discrete Xe GPU. Intel is also reportedly making good progress on 5nm. The first 5nm products are expected in 2023 or 2024.