The shortage of Intel’s PC CPU (central processing unit) chips which began in August 2018 is expected to continue through Q1 2020. CPU chips power desktops, laptops, servers and components.

While Intel has invested heavily in 2019 to increase their manufacturing capabilities of the needed chips, they acknowledged during their 2019 Q3 Earnings Call that they have not been able to meet demand and admits they ‘have not yet resolved this challenge’.

In a November 20, 2019 letter to customers and partners, Intel apologized for the PC CPU supply delays. The reasons behind the extended shortage remain unclear – other than Intel pointing to demand outpacing their supply forecasts, despite their increase in manufacturing capability. Other rumors and speculation suggest that Intel is prioritizing higher margin CPU chips.

Intel did state that it would continue to invest to raise manufacturing capacity of PC CPUs by 25 percent next year–enough to give Intel an inventory cushion and reassure their customers.

Larger OEMs of products that rely on Intel’s CPU chips will be impacted less than the smaller manufacturers. However, everyone can expect that the shortage will cause lead times to be longer, expedited orders will be limited, some products will have a tight supply, and some will be constrained.

The shortage largely affects Intel’s 14nm chips – also known as Whiskey Lake and Coffee Lake.

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