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It’s no secret that Intel has lost its competitive edge in the chip manufacturing industry. But the company is still facing enough demand for its processors that it’s talking about a shortage.
During a Q3 earnings call, Intel executives noted that customer demand has outpaced supply for server and PC CPUs. "The shortage is pretty much across our business," said Intel CFO David Zinsner. The company also expects the tight supplies to persist into next year.
Specifically, the shortage involves the company’s older chip manufacturing tech, Intel 10 and then Intel 7, which has been used to fabricate “Raptor Lake” desktop CPUs, along with server-grade CPUs. Since the company isn’t investing in the older chip nodes, Zisner said, “as we get more demand, we're constrained. In some ways, we're living off of inventory.”
The demand is surprising since buyers typically want the latest chip tech; Intel itself has been using rival TSMC to build some of its newest chips, including last year’s laptop-focused Lunar Lake processors and the desktop-focused Arrow Lake line.
However, Intel says customers have been purchasing its server CPUs as companies rush to build new data centers to meet the surging demand for AI computing. The same AI demand has created shortages for the wafer substrate necessary to build computer chips.
Another factor is businesses migrating from Windows 10 to Windows 11, which may require new PC hardware. “The Windows refresh is happening more significantly than I think we expected,” Zisner said when asked why customers are focusing on Intel’s older products.
“And so Raptor Lake is also a product that addresses that,” he added. (We should note that Raptor Lake chips have been known to suffer from a voltage bug, although the company has addressed the problem.)
For customers seeking the latest technology, Team Blue is preparing to release new PC processors utilizing its Intel 18A process—or what it hopes will turn around the company's fortunes. During the earnings call, Intel CEO Lip-Bu Tan said the company remains on track to launch the first Intel 18A chip for PCs, “Panther Lake,” by year’s end, followed by additional processors during 2026's first half.
For desktops, Tan added: “Our next-generation Nova Lake product will bring new architecture and software upgrades to further strengthen our offerings, particularly in the PC gaming halo space. With this lineup, we believe we will have the strongest PC portfolio in years.”
However, Nova Lake isn’t expected to arrive until next year. The desktop chips will also reportedly use Intel’s 18A node and rival TSMC’s chip manufacturing tech.