Intel CPU pricing on the rise due to substrate shortages

Posted on Wednesday, April 07 2021 @ 10:05 CEST by Thomas De Maesschalck
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It's one of the worst times ever if you're in the market for a new gaming PC. Shortages of various components have been going on for many months now -- and there's little hope things will improve in the near future. The video card market is particularly dire, as it's hit by a double whammy of supply constraints and higher demand due to yet another cryptocurrency boom.

Intel CPU manufacturing now also hit by shortages

AMD's processors seeing some supply problems too and now news is hitting the wire that Intel is not entirely immune either. Intel has its production capacity, and the firm has invested in expansion over the past couple of years, but the company relies on third parties for substrates.

An exclusive report from WCCF Tech claims Intel reported substrate shortages to key partners throughout last week. In the near term, supply of Rocket Lake-S processors will be good because production in Q1 2021 was not affected by shortages.

Unfortunately, the substrate shortages are getting worse and this will have an impact on Rocket Lake-S production in the current quarter. The site says Intel will prioritize its higher-end processors, which means the Core i7 and Core i5 will be more heavily impacted than the flagship Core i9 parts.

Intel is in a better position than AMD, which makes its chips via semiconductor foundry TSMC, but pricing of Intel CPUs is still expected to rise. These shortage-driven price increases are expected to be lower than what's seen for AMD's Ryzen series. Prices of Rocket Lake-S chips are already increasing.
As we have said in the Financial Outlook press release on March 23rd, demand for semiconductors and Intel products is very strong. We’ve been expanding our capacity to meet this demand and, as a result, we expect to grow our annual client CPU supply double-digits year-over-year versus 2020. However, the unprecedented global demand for semiconductor components and substrates is a challenge for many industries, including ours. We are actively working with our supply chain partners to increase the availability of third-party materials and components to further improve output for our processors and also support the broader PC ecosystem. We remain focused on supporting our customers and we will continue working to increase supply to meet our customers’ needs. -Intel spokesperson to Wccftech

Overheated market until 2022

ARS Technica offers some more insight about the semiconductor market in general and echos recent sentiment about things not getting a whole lot better until sometime in 2022. The site points out that manufacturing capacity at foundries is indeed not the only problem, it's also a shortage of wafers and packaging substrates.

For car makers, the situation is particularly dire. They're often several steps removed from semiconductor manufacturers because they have outsourced the production of an increasing number of parts to suppliers. Furthermore, there's no flexibility to switch to a different chip provider as it can easily take three to six months to qualify automotive-grade chips from a new factory.
Chip manufacturers have responded by ramping up production on their existing lines where they can, but that’s difficult in fabs that are already running above 90 percent capacity. To free up more production, they’re trying to tweak production rates on existing machines, request early deliveries for tools they’ve already ordered, and squeeze more of those tools into space-constrained factories. “It’s just a big scramble,” Richard said.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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