System News

Intel is so successful it hurts. Mark Williams looks at how Intel’s CPU shortage will impact the market over the coming months.

Intel’s 14nm production lines have reached maximum capacity. In fact, they’re over capacity. So delayed is Intel’s 10nm node, that it’s had to push product schedules back, move focus to higher profit margin parts and to even push some chips back up onto the old 22nm process to clear manufacturing throughput.

The way Intel typically operates is that CPUs get moved onto the new manufacturing node when it comes online, then less profitable chips (such as NICs and motherboard chipsets) get moved down to the now wellestablished outgoing node. This keeps those parts just one generation behind and costing less to produce than the more expensive CPUs that helped refine the manufacturing process.

So confident was Intel that the 10nm issues would be solved by now that it moved the motherboard chipsets down to the current 14nm++ technology from 22nm before the CPU manufacturing had switched over to 10nm. With everything now being made on 14nm++ and an unexpected uptick in demand for PC products of late, there simply isn’t enough 14nm++ manufacturing capacity to support making everything at once to the volumes required.

So, Intel has decided to prioritise higher margin CPUs in the form of its Xeon and Core products at the expense of its lower-end brands like Pentium.

It also forced Intel’s hand with the 9th generation CPU line-up, making it the fifth in a row on the 14nm node.

It will also move some chipset manufacturing back up to 22nm — for example the H310 chipset, which will be re-spun to 22nm and come out branded as a H310 v2.0.

All this has resulted in a CPU supply shortage of around 5-10% that, for the moment, mostly only means higher priced CPUs as supply gets squeezed. As a specific example, the i7-8700K has increase in price by some $65 over the past month, putting it a full $120 (or 25%) above AMD’s most expensive competitor, the Ryzen 7 2700X. And the 8700K certainly isn’t 25% faster than the 2700X — it’s around half that in best case scenarios. Thus, the price to performance metrics start to look bad for Intel.

When asked if the Intel CPU shortage might result in a higher ratio of AMD systems in their PC offerings mix, Gennady from Scorptec replied, “Our offering would remain similar, but customers may uptake AMD systems more simply because they are more cost effective currently.”

With John from TI Computers and Jaimie Ianson from Leader Computers both saying that with some minor operating changes they’re weathering the shortage well; the fact is that if you want an Intel-powered system between now and mid next year when the shortage is expected to end, you’ll be paying a premium for the privilege.

It’s certainly worth considering AMD Ryzen products during this period, as they’ll offer even better value for money in comparison. Particularly when AMD rolls out the Zen 2 CPUs early next year made on TSMC’s 7nm production node, which is reportedly very similar to Intel’s troubled 10nm.

For the first, this could give AMD time a manufacturing advantage over Intel. And without supply constraints, it could see AMD take back a large percentage of the market share in the first half of next year.