Posted on Monday, Jul 26 2021 @ 18:14 CEST by Thomas De Maesschalck
During Intel's second-quarter earnings call, CEO Pat Gelsinger and CFO George Davis had sobering remarks
about the shortages in the PC supply chain. First up, Gelsinger mentioned he expects shortages to bottom out in the second half of this year, but he added that it will take another one to two years before the computer industry is able to completely catch up with demand.
Intel expects shortages of consumer CPUs in Q3 2021
Davis discussed the impact of the industry-wade substrate shortages and predicted this issue will cause a hit to the revenue of Intel's client computing group. The third quarter of this year is expected to be the worst, Davis predicts "acute" shortages of consumer CPUs. The chip giant will prioritize shipments of enterprise and datacenter products.
Moving to our Q3 and full-year outlook. For Q3, we are guiding revenue of $18.2 billion, up 5.4% year-over-year. We remain in a highly constrained environment where we are unable to fully supply customer demand. In CCG, we continue to see very strong demand for our client products and expect TAM growth to continue. However, persistent industry-wide component in substrate shortages are expected to lower CCG revenues sequentially. We expect supply shortages to continue for several quarters, but appear to be particularly acute for clients in Q3. In data center, we expect enterprise and government, and Cloud to show further recovery in Q3.
-- Intel CFO George Davis
The culprit is said to be a shortage of Ajinomoto build-up film (AFB) substrate. Intel is unable to source enough supply and this prevents the company from meeting the demand for its chips. The chip giant has invested in ABF substrate makers and is finishing production of ABF substrates in its own facilities to increase production. These efforts are expected to result in better supply in Q4 2021.
Intel now making more 10nm than 14nm wafers
It took many years, but Intel's 10nm process is now finally in volume production. The chip giant claims it's now making more 10nm wafers than 14nm wafers. Yields have improved significantly and the production of a 10nm wafer is said to be 45 percent lower than one year ago.