Intel boosts spending to head off PC shortages
Company surprised by renewed demand for personal computers
Intel Corp., which dominates the market for personal computer processors, said it’s taking steps to increase output of older chip technology, which would alleviate a shortage that had threatened to slow the industry’s growth.
The Santa Clara, Calif.-based chipmaker is adding an extra $1 billion to its capital equipment budget this year, increasing output from facilities in the U.S., Ireland and Israel, Intel said in a letter to customers posted on its website Friday. The company said it’s been surprised by a return to growth in demand for personal computers. Total spending in 2018 will be $15 billion.
Earlier this month, the company announced it was adding 100 jobs at its Rio Rancho plant as it transfered development of new technology to its New Mexico plant.
Intel has struggled to shift to a more-advanced manufacturing technique of next generation 10-nanometer chips, which provide more processing power. That struggle has given rivals like AMD a chance to catch up in this crucial part of the chip industry. But Friday’s update suggests that demand for Intel’s older chips remains strong.
Intel said it’s making progress in moving its output to the next generation 10-nanometer technology, an effort that’s as much as two years late, according to some analysts’ estimates.
“Yields are improving, and we continue to expect volume production in 2019,” Intel said. Yield refers to the amount of usable chips made from every production batch.
Shrinking the dimensions of the tiny transistors that give chips their function allows chipmakers to produce them more cheaply, make them more powerful or give them the ability to use less electricity. Intel has led the race to make such improvements, measured in nanometers, or billionths of a meter, for decades. The increase in spending will go to the older 14-nanometer chips, which were introduced at the end of 2013.