Tuesday, October 2, 2018

Intel says PC chip supply is on track to meet full-year revenue targets

In a letter to customers, Intel CFO and Interim CEO Bob Swan says the chipmaker is investing an extra $1 billion in its 14nm manufacturing sites.


Intel's interim CEO Bob Swan is assuring customers and investors that it will have the PC chip supply to at least meet the full-year revenue outlook that Intel announced in July. In a letter published online Friday, Swan outlined steps the company is taking in response to the unexpected upswing in the PC market.

"The surprising return to PC TAM growth has put pressure on our factory network," Swan wrote.

Second quarter PC shipments grew globally for the first time in six years, according to Gartner. Swan said Intel now expects modest growth in the PC total addressable market (TAM) this year for the first time since 2011. In July, Intel raised its full-year revenue outlook to $61.3 billion due to the stronger-than-expected PC market.

Intel is prioritizing production of Xeon and Core processors to serve high-performance segments of the market. However, Swan noted, "Supply is undoubtedly tight, particularly at the entry-level of the PC market."

In response, Intel is an extra $1 billion in its 14nm manufacturing sites in Oregon, Arizona, Ireland, and Israel. That brings its capital expenditures investments to a record $15 billion for the year.

Swan also said Intel is making progress with 10nm. "Yields are improving and we continue to expect volume production in 2019," he wrote. Intel initially planned to release 10nm processors in 2015, but it revealed in its Q1 earnings report in April that it was only shipping 10nm product in low volumes,

Swan also made note of Intel's "customer-first approach" to align supply with demand.



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