Friday, September 28th 2018
Intel CFO and Interim CEO Writes an Open Letter on Processor Supply
Growing anger among PC manufacturers, retailers, and consumers in general, over supply issues with Intel processors, compounded with rising prices, and prompted Bob Swan, CFO and Interim-CEO of Intel, to write an open-letter, addressed to customers and partners, which counts you, since we received it in our main news channel from Intel. The language in the e-mail is straightforward and we wouldn't want to interpret it further than Intel grappling with a combination of massive demand from both its cloud-computing customers, and PC manufacturers hit by a surge of customers upgrading their machines (probably because it took Intel 10 years to increase CPU core counts, giving people a reason to upgrade).
To mitigate this, Intel is firing up all its manufacturing assets, across Oregon, Arizona, Ireland and Israel, in addition to its main foundries, by pumping in an additional $1 billion in capital expenditure (which is now at $15 billion). The letter doesn't miss out mentioning 10 nm, that the company is making progress with yields, and that volume production should roll out in 2019 (without offering guidance as to when). Intel also reassured PC OEMs that their supply teams will be in closer contact with them over the coming weeks. Without further ado, the open-letter follows verbatim.
The letter follows.
To mitigate this, Intel is firing up all its manufacturing assets, across Oregon, Arizona, Ireland and Israel, in addition to its main foundries, by pumping in an additional $1 billion in capital expenditure (which is now at $15 billion). The letter doesn't miss out mentioning 10 nm, that the company is making progress with yields, and that volume production should roll out in 2019 (without offering guidance as to when). Intel also reassured PC OEMs that their supply teams will be in closer contact with them over the coming weeks. Without further ado, the open-letter follows verbatim.
To our customers and partners,
The first half of this year showed remarkable growth for our industry. I want to take a moment to recap where we've been, offer our sincere thanks and acknowledge the work underway to support you with performance-leading Intel products to help you innovate.
First, the situation … The continued explosion of data and the need to process, store, analyze and share it is driving industry innovation and incredible demand for compute performance in the cloud, the network and the enterprise. In fact, our data-centric businesses grew 25 percent through June, and cloud revenue grew a whopping 43 percent in the first six months. The performance of our PC-centric business has been even more surprising.
Together as an industry, our products are convincing buyers it's time to upgrade to a new PC. For example, second-quarter PC shipments grew globally for the first time in six years, according to Gartner. We now expect modest growth in the PC total addressable market (TAM) this year for the first time since 2011, driven by strong demand for gaming as well as commercial systems - a segment where you and your customers trust and count on Intel.
We are thrilled that in an increasingly competitive market, you keep choosing Intel. Thank you.
Now for the challenge… The surprising return to PC TAM growth has put pressure on our factory network. We're prioritizing the production of Intel Xeon and Intel Core processors so that collectively we can serve the high-performance segments of the market. That said, supply is undoubtedly tight, particularly at the entry-level of the PC market. We continue to believe we will have at least the supply to meet the full-year revenue outlook we announced in July, which was $4.5 billion higher than our January expectations.
To address this challenge, we're taking the following actions:The actions we are taking have put us on a path of continuous improvement. At the end of the day, we want to help you make great products and deliver strong business results. Many of you have been longtime Intel customers and partners, and you have seen us at our best when we are solving problems.
- We are investing a record $15 billion in capital expenditures in 2018, up approximately $1 billion from the beginning of the year. We're putting that $1 billion into our 14 nm manufacturing sites in Oregon, Arizona, Ireland and Israel. This capital along with other efficiencies is increasing our supply to respond to your increased demand.
- We're making progress with 10 nm. Yields are improving and we continue to expect volume production in 2019.
- We are taking a customer-first approach. We're working with your teams to align demand with available supply. You can expect us to stay close, listen, partner and keep you informed.
Sincerely,
Bob Swan
Intel Corporation CFO and Interim CEO
54 Comments on Intel CFO and Interim CEO Writes an Open Letter on Processor Supply
Not to mention x86 is nowhere to be found in FF <5W even after Intel poured tens of billions $ worth of
bribescontra revenue!What he wrote is correct. Intel's revenue is going up.
I'll just patiently wait for @btarunr explanation. :-)Wrong post quoted? :-)
Highly incorrect there are no X86 Knockoffs on the market if there were you would See the FULL MIGHT OF AMD AND INTELS LEGAL TEAM JOINTLY GO AFTER THEM
- We are investing a record $15 billion in capital expenditures in 2018, up approximately $1 billion from the beginning of the year. We're putting that $1 billion into our 14 nm manufacturing sites in Oregon, Arizona, Ireland and Israel. This capital along with other efficiencies is increasing our supply to respond to your increased demand.
- We're making progress with 10 nm. Yields are improving and we continue to expect volume production in 2019.
- We are taking a customer-first approach. We're working with your teams to align demand with available supply. You can expect us to stay close, listen, partner and keep you informed.
Just words for keep investors on wallstreet...but in real: intel have nuffing just refresh refreshing "lakes" pakes ..if they have they will relase now. but they keep whole world in stone ages with core arch..1. intel have no brains to new arch .. even to zen 2 2019... sooo they can "invest " 100 billion and still will behind AMD
2. where and how they will invets that 15 B??? pay manager 100K per month or others?? buy new machine for process if TSMC and samsung have best and best people ?))) creating own machines and process is superexpensive and no reliable in todays...its not 1998 )) where hi tech was only exclusive"made in usa or intel" "magic" .-..))
3. when amd was down they dont cry like babe and work (lisa) NOw shiintel acting like shooted dying animall and cryyyyyyy....
4. we are taking "approach" ...... oo menn oo dany booy )))) cry my river cryy and do something dirty agains amd like always
5. monopol is best friend of capitalism.. and intel cry it showing absolutly Clear "we want monopol but not melt own stash of dollahs witch was accumulated in years of monopoly dirty game" )))))))
6. GO LISA and destroy monopol !
Edit: that fabs is reliable if intel have world monopol ! if no.. they will "eat " quick all intel income in "investing" .. intel can not support fabs around globe contra trying find best people... ist killing own self scenario .. just use brain people,,,
Also, they list in your pic 1171680 CPU sales tracked... that really can't be all the CPUs sold in the past 7 years...
It doesn't really show that something is changing that much...
Althou it doesn't have september yet, will be fun to see.
I am on gen 4 Core i5 and still not planning to upgrade, as gen 6 and 7 were crap updates not worth the money to change the MB and memory.
Is gen 8 much better? PC Gaming should not have an actual real need to upgrade, there will not be a significant performance increase.
I don't know much about the market in Germany, but 1.2 mln CPUs sold over 7 years is way less than 170k CPUs yearly sold to a nation of 83 mln.
Lets assume there are 80mln x86 consumer CPUs in use in DE and they're replaced every 4 years.
So Mindfactory would be reporting 1% of CPU sales.
Lets be honest: even if AMD managed to have 100% share in custom built desktops, they wouldn't even get close to what Intel sells.
Until they manage to attract OEMs, the gap will remain huge.But Intel and AMD know very well how many CPUs they sell. :-)
So even if AMD doesn't know how many CPUs Intel sells (unlikely), if they're so proud of the growth, why not give us their figures?
This is where AMD Ryzen is winning. They can make smaller dies and stitch them together thus reducing the complexities of making higher core count chips. Infinity Fabric like setups are the future going forward.
This letter from Intel sounds so hypocrites.
They are in the mud up to the neck, to be polite, if not more. Intel just deserves what is happening to them. They already had a lesson with Pentium 4, it wasn't a lesson learned, so now it is even much worse. But will they still learn? I doubt it.
:peace::nutkick: