Hewlett Packard Enterprise expects Intel Xeon shortages throughout 2020

Despite billion dollar investments from Intel, the market is still not receiving enough Intel processors to meet demand. Shortages of Intel processors have been going on for 18 months now and Hewlett Packard Enterprise says they expect certain Intel Xeon processors will remain in short-supply throughout 2020.

In a statement to The Register late last week, HPE confirmed it is "experiencing the industry-wide supply constraints with Intel 2nd Generation Xeon (Cascade Lake) processors." It continued:

Based on demand, we are expecting supply will remain constrained through 2020. Server platforms which use these processors are affected. In order to minimise customer impact as a result of these supply constraints with Cascade Lake processors, HPE urges customers to consider alternative processors, which are still available. We are in constant dialogue with our partners at Intel and have a strong relationship with them, and we know they are working on the issue.

Various companies are complaining about a shortage of Intel CPUs. Many factors are at play here and Intel is prioritizing high-margin, high-end server chips at the expense of desktop and mobile parts. The chip giant has been struggling with 10nm for many years now and most of the company's product mix is now on 14nm.

The high demand isn't all good news though. The CPU vulnerabilities that have plagued system admins for the last two years are part of the reason why there's so much demand for Intel server CPUs recently. Each new patch and mitigation technique results in a performance cut and that's resulting in more sales of Xeon processors because at least until now, it's easier and cheaper to buy more Xeon chips from Intel than to test and validate those new EPYC processors from AMD.