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How Intel Could Address Its Supply Shortage

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Intel takes measures to address supply shortage

So far, we’ve discussed how 14nm (nanometer) supply constraints at Intel (INTC) have forced several PC vendors to cut their shipment forecast for Q4 2018. JPMorgan Chase expects global PC shipments to fall 5%–7% in Q4 2018. The widespread impact of the CPU (central processing unit) supply shortage has called for urgent measures from Intel. The chipmaker has prioritized its Xeon server CPU and its latest eighth-generation U-Series and Y-Series Core CPUs.

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Intel ramps up production in Vietnam

According to Intel’s September 7 product change notification, the company has added a new facility in Vietnam and is ramping up production of some 14nm CPUs affected by the supply shortage. The facility is built on the Copy Exactly! philosophy, under which the facility copies fabrication, sorting, and assembly operations to improve product availability and maintain consistency in quality.

The facility is expected to start shipping products as soon as October 8. A Wccftech article stated that the Vietnam facility would only produce ULV (ultra-low-voltage) processors for PC OEMs (original equipment manufacturers) and ODMs (original design manufacturers). Intel’s supply shortage fueled several rumors.

Rumors: Intel to outsource CPU manufacturing

DigiTimes, citing unnamed industry sources, stated that Intel might outsource the production of its entry-level H310 chipsets and several other 300-series Coffee Lake processors to TSMC (TSM) to focus its manufacturing facilities on the production of high-margin server CPUs. TSMC already manufactures Intel’s field-programmable gate arrays and baseband modems. In the next part, we’ll look into more rumors and how long this undersupply situation could last.

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