Intel CPU Shortage To Ease By Mid-2019, Interim CEO Says

Intel's CPU shortage is expected to ease by mid-2019, the company's interim CEO said, as the semiconductor giant continues to prioritize production of higher-end processors.

The comments by Bob Swan during Intel's fourth-quarter earnings call Thursday appeared to be the first time the company has given a timeline for when supply issues could improve. Swan, who has been Intel's interim CEO since last June, avoided the timeline question during the previous earnings call.

"Our expectation is, working with our customers, that we will be through the supply constraints as we exit the second quarter of the year," Swan said on the Q4 call.

[Related: AMD: 7nm Ryzen's CES Debut Just The Start Of New Fight Against Intel]

Until then, Swan said the company expects the shortage will constrain some growth in the first half of 2019, which contributed to its cautious revenue forecast for the year.

Kent Tibbils, vice president of marketing at ASI, a Fremont, Ca.-based distributor, told CRN that if Intel's CPU supply is set to improve by June or July, Tibbils said, he expects ASI will likely be caught up by August or September.

"Mainly that's because of the time it takes the supply to get built up throughout the entire channel," he said.

Tibbils said the lack of lower-end CPUs hasn't been a major issue for customers because they're largely buying higher-end products, like the Intel Core i5 and up. Lower-end models, like the Core i3 or Pentium, usually sell more during that school computer buying season, which usually runs from June to September, he said.

However, Tibbils said, despite Intel's efforts to prioritize production of higher-end processors, there have still been some shortages with those products, resulting in delays and longer lead times for customers.

"They're prioritizing higher SKUs, but that doesn't mean supply is abundant on those," he said, adding that, overall, the situation is "manageable."

Two leaders within Intel's channel organization, Jason Kimrey and Todd Garrigues, previously told CRN that they are committed to improving communication and transparency with channel partners about the shortage.

"I would tell you that we are having much more direct, open transparent dialogue with them to help them plan and help our mutual customers plan to roadmaps and plan around the supply," Kimrey said in December.

In the several months since Intel's shortage began, the company has announced new initiatives to improve processor supply, including an additional $1 billion in manufacturing capacity. Swan on Thursday reiterated previous statements that the company is prioritizing production of higher-end CPUs over lower-end products.

The shortage has had a wide-ranging impact on the PC market. PC shipments have slid, with some OEMs, including Acer and Asus, reporting lower-than-expected sales while some of Intel's channel partners have dealt with delayed shipments and higher prices. Earlier this month, Lenovo's North American chief told CRN that the shortage is impacting sales, which the company is mitigating by offering AMD- and Arm-based PCs as alternatives.