Shortages of Intel’s CPUs have persisted for well over a year now, but according to Dell, they actually got worse in the ongoing quarter because of unexpectedly high demand for client computers and servers. As a result, the company had to cut its revenue forecast for the fourth quarter as sales of its PCs were impacted by the tight supply.

Last week Intel issued a letter apologizing for CPU shipment delays because despite of the fact that it increased its 14 nm capacity by 25% year-over-year in 2019, demand still outpaced supply. Furthermore, Intel experienced production variability in the fourth quarter and because it had limited inventory buffers, it could not absorb the impact. Intel did not explain what variability meant in this case, but based on comments from Dell, it looks like Intel could not produce enough processors for commercial and premium system.

Here is what Jeffrey Clarke, COO of Dell, had to say:

“Intel CPU shortages have worsened quarter-over-quarter the shortages are now impacting our commercial PC and premium consumer PC Q4 forecasted shipments.”

Even though Intel’s supply and demand balance is not favorable to makers of systems, Dell’s PC business revenue was on the rise in Q3 increasing to $11.4 billion by 5% year-over-year. Sales of commercial PCs were up 9% to $8.3 billion, whereas shipments of consumer computers were up 6% to $3.1 billion.

It is particularly noteworthy that Dell remains cautious about Intel CPU supplies going forward, though it naturally does not make any actual predictions, but rather promises to monitor situation and adjust forecasts. Dell is not the first PC company that is cautious about Intel’s ability to meet demand as ASUS also expressed similar concerns earlier this month.

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Sources: Dell, Reuters

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  • Jimbo Jones - Friday, November 29, 2019 - link

    Qasar -- yeah its all a bit funny ... I have noticed that the "fanbois" comment sentiment has shifted away from "Intel has the best products!" to things like "CPUs don't really matter that much anyway!"(literally read that from an Intel fanboi) and "But Intel makes 100x more money!" and "Intel still has majority of the market share!"

    Its actually hilarious ... Come'on people, the next few rounds in this fight is going to AMD whether you like it or not. Making ridiculous claims just makes you look uneducated.
    Reply
  • Qasar - Saturday, November 30, 2019 - link

    Jimbo Jones you forgot how they also tout the clock speeds intel gets over amd, or how amd lies about their clocks, and, how its ok that intel use more power then they state, but when amd did it, it was a crime ..... Reply
  • AshlayW - Friday, November 29, 2019 - link

    Again, more rubbish. We've seen many major companies like Amazon and Twitter, etc moving to EPYC based systems. Ryzen 3000 is outselling Intel's lineup by an absolutely huge amount. You may like iron-fisted monopoly on the CPU industry, stagnation, no innovation and obscene prices, but apparently consumers don't.

    What if Intel can't 'catch up'? If AMD keeps this momentum we could see a huge shift in long-term x86 processor leadership, away from Chipzilla.
    Reply
  • Jimbo Jones - Thursday, November 28, 2019 - link

    I'm finding it a bit odd that consumer desktop parts seem to have no shortages at all -- in stock everywhere and have been since 9900k launched. There is NO desktop part shortage. Is Intel really sacrificing the production of their extremely high margin sever parts, angering all their best customer, just so they can meet demand for desktop parts?

    They just launched an entirely new 14nm HEDT desktop line, that was announced only a couple months ago. Wouldn't it make sense to delay that launch and give priority to server customers, like Dell and HP who are "blaming" Intel shortages on their greatly reduced guidance?

    Are we to believe that Intel is giving their largest partners the middle finger saying "hey pal, we got a non-competitive HEDT line to launch, screw your Xeons!"

    Something is not right about this at all ... its starting to look like they are trying to convince their investors that "shortages" are to blame for them losing market share to AMD, to try to hide the fact they are losing share to AMD at a rather high rate of speed. At least THAT would make some sense.
    Reply
  • Jimbo Jones - Thursday, November 28, 2019 - link

    Correcting myself on Intel desktop stock ... "... in stock everywhere and have been since 9900k shortages ended..." Reply
  • M O B - Friday, December 6, 2019 - link

    Certainly a HEDT shortage. 10980XE has an estimated shipping date of mid-Feb 2020 now. How many were actually sold at launch? A few thousand?

    7xxx and 9xxx had shortages as well in the last 18 months, no doubt as they are competing for Xeon silicon, while lower-end isn't.
    Reply
  • Father Time - Sunday, December 1, 2019 - link

    The reason is simple: To compete in any meaningful way with AMD Intel had to make bigger and bigger chips - that means each chips eats more supply and yields go down exponentially with size, so defect rates skyrocket with the "larger chips to compete" strategy. Reply
  • Der Keyser - Wednesday, November 27, 2019 - link

    No, not really. AMD is still very small comparatively and are mostly noted by the enthusiast crowd. Standard enterprise desktops and normal consumer PC’s is still massively dominated by Intel. But AMD is moving up, and the longer they remain both faster, cheaper and Intel cannot deliver, the more influense they might get on the likes of Dell, HP and the other big brand names.

    Here’s hoping they will take advantage of the situation instead of hiking up prices. That last batch of higher end SKU’s unfortunately suggest they are going for the money. That will be their downfall when Intel retaliates in a year or two (once their new architechture is ready and their 10 and 7nm comes properly online). The need to get a very strong foothold in the market to not start suffering again when Intel is back.
    Reply
  • PEJUman - Wednesday, November 27, 2019 - link

    I work at a global company (hundreds of thousands employees) with HQs in europe and US. This year, for the first time ever, our lease replacement laptops are HP elitebooks with Ryzen U series instead of Intel.

    AMD definitely made some inroads, now they have to keep executing for the next few years and get their battery life competitive to Intel 15W parts. Personally I believe AMD have the upper hand on performance/power metrics today, but they don't have their sleep/idle fully sorted out.
    Reply
  • rahvin - Wednesday, November 27, 2019 - link

    The key success in the business market is continued execution. The major oems will only use AMD in the business side if they can continue to execute. The OEMs survive on thin margins so they arent going to spend design money on new CPUs unless they can keep using that design for multiple generations. Reply

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