So, we spent a billion and a half more capital this year to ramp more 14 nm capacity. So, we got ourselves in a position where we’re supply constrained and we’ve done a variety of things to get to the position where we can unequivocally say to our customers that we will not be constrained on your growth.
Ith the push of 10 nm going out a little bit, the supply that we’re counting coming from 10 nm was not actually going to happen. Regarding component shortages, Swan stated (Opens in a new window): ASPs have grown faster than unit shipments - the latter were up in the high single digits, compared with double-digit growth in ASPs. Swan did say that Intel's data center business is on track to grow 20 percent for full year 2018, and that this represents twice the full-year growth that the company expected back in 2017. Intel could still plan to roll over to 7nm more quickly than its typical cadence, but the company has released no details on that. This implies that rumors of a limited or mobile-only 10nm ramp could be incorrect. So, an increasing portion of our business, as we get into 2020, will be transitioned over to 10 nm." So, we’ve compressed the timeframe to go from PC to server. He reiterated that Intel was on-track to ramp 10nm for holidays 2019, before stating that FPGAs would also meet that guidance, with servers "a relatively fast follow on 10 nm, early in 2020.
Intel's interim CEO Robert Swan spoke at the 22nd annual Credit Suisse TMT Conference on November 27 and addressed some of these concerns. The US-China trade conflicts have further frustrated the supply chain players, including chipmakers, preventing them from enjoying the peak season effect in the third quarter. The sources said that Intel's CPU supply shortfalls seen since the beginning of the third quarter 2018 have disrupted the shipment schedules of Taiwan PC and notebook ODMs.
That shortage could ease in the first quarter of 2019, with component orders expected to tick up before the Lunar New Year in early February, according to DigiTimes. The company announced during its last conference call that it would spend an additional $1B to increase 14nm production.
Intel has been grappling with a CPU shortage for months, due to production constraints associated with its difficult 10nm ramp as well as increased demand for its 14nm data center processors.
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