In an open letter to the interim Executive Director of Intel Bob Swan (Bob Swan) is finally officially recognized has long been obvious: offer of processors for the PC market, entry level is clearly insufficient. So to build an inexpensive PC or buy a cheap laptop now is much more complex.

In the consumer sector, PC, game and commercial systems by Intel, according to its head, expects modest growth of supply. At the same time, while the company will focus on meeting the demand for Xeon and Core i high class. Without a doubt, the situation plays into the hands of competitors AMD and Qualcomm, especially due to the fact that they currently rely on inexpensive laptops with increased battery life.

To help improve the situation, Intel has pledged to invest $1 billion in the current 14-nm production capacity. With regard to the repeatedly postponed 10-nm limited debut of Cannon Lake in this year, the head of Intel reports that the yield of the crystals is improved and mass production of the company will be released in 2019.

Give the whole an open letter to Bob Swann for consumers and partners:

“In the first half of this year our industry has experienced significant growth. I want to remind you how we were to Express our sincere thanks and to assure you that we will continue to work to support you and your innovation issue leading performance of Intel products.

First, a few words must be said about the current situation… Continues explosive growth of data, requiring the need for processing, storage, analysis and sharing — all this stimulates innovations in the industry and the great demand for computational performance for cloud servers, networks and enterprises. In fact, our business is oriented to data, increased by 25 % in the first half of the year, and the income from the supply of solutions for cloud services have increased over the same time 43 %. The performance of our business in the PC even more awesome. Thanks to the efforts of the entire industry, our new products have convinced customers that it’s time to update their computers. For example, Gartner reports that worldwide PC shipments in the second quarter rose for the first time in six years. Currently, we expect modest growth in the global PC market for the first time since 2011, which will be due primarily to the high demand in the gaming and commercial system — the segment in which you and your customers to trust and rely on Intel.

We are encouraged that in an increasingly competitive market you continue to make choices in favor of Intel. Thank you.

Now back to the challenges we face… the Unexpected return of the PC market to growth put pressure on our production network. We give priority to the release of processors Intel Xeon and Intel Core to best serve the high performance segment of the market. However, the proposal now is still very limited, especially in the sector of solutions for entry-level PCs. We continue to believe that, at least, will be able to supply corresponding projections of annual revenues that we announced in July. That is, you will be able to get $4.5 billion more revenue than expected in January.

To solve the existing problem, we take the following steps:

  • This year, our capital expenditures will reach a record $15 billion, about $1 billion more than planned at the beginning of the year. We put this $1 billion in our 14-nanometer manufacturing sites in Oregon, Arizona, Ireland, and Israel. This capital, along with other effective actions will allow to increase supplies to meet increased demand.
  • Making progress in the development of 10-nm. Indicators of yield of the crystals improve, and we are going to start mass production in 2019.
  • Adhere to the approach that puts clients at the forefront. We work with your teams to match the demand with the existing supply. Be sure that the work in this area will continue: we will listen to you, to communicate and to continue to inform.

Actions taken have enabled us continuously to improve the situation. In the end, we want to help you to produce excellent products and provide high results of business activity. Many of you are long-time customers and partners of Intel, and we will try to do everything in our power to resolve the issue.

Sincerely yours,

Bob Swan, financial and interim Executive Director of Intel Corporation”.

Recall: in late August, the Asian resource Digitimes quoted the words of leaders Acer and Compal Electronics who spoke about the significant influence of the situation on the supply chain and predicted deterioration by the end of the year. Since then, the situation on the world market is really spoiled. According to analysts from J. P. Morgan, the shortage of Intel chips could reduce PC sales in the last quarter of the year to an impressive 5-7 %. There were reports that Intel in an attempt to rectify the situation returned to the 22-nm norms in the production of new chipsets H310C.

It is reported that a shortage of Intel processors is reflected in the market RAM: prices for these products began to decline. Until the end of the year, a drop can be 5 %, so even Samsung allegedly plans to cut production of memory, and Toshiba warned investors about the weakening of the supply of DRAM and NAND in connection with the shortage of Intel processors. The situation with a deficit of 14-nm Intel lines can also be connected with the supply of modems for the new Apple iPhone.

Analysts believe that the results of the situation AMD can triple its market share in the market of processors for PC with 10% to 30 %. For Qualcomm, which barely enters the market of cheap Windows-laptops based on ARM chips, it is also a gift. Generally, it is believed that the deficit should be overcome in the first quarter of 2019, but the President of the company Compal Electronics Martin Vaughn (Martin Wang) believes that difficulties will be left behind until the second half of 2019. British PC maker Novatech also officially warned its customers that the problems will affect the future of chip Core i the ninth generation.


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