Intel apologies for another supply shortfall

November 25, 2019 //By Peter Clarke
Intel apologies for another supply shortfall
A year on and Intel feels compelled to apologise again for its inability to meet demand for its processors for personal computers and has admitted to "production variability" in 4Q19.

The company's executive vice president of sales, Michelle Holthaus, has written an open letter apologizing for recent shipment delays for PC CPUs which she attributed to strong demand.

"In response to continued strong demand, we have invested record levels of capex increasing our 14nm wafer capacity this year while also ramping 10nm production. In addition to expanding Intel’s own manufacturing capability, we are increasing our use of foundries to enable Intel’s differentiated manufacturing to produce more Intel CPU products," Holthaus wrote in the later dated November 20.

There is a suspicion that poor yield of the 14nm process, and Intel's failure to bring up the next-generation 10nm process, could explain the shortfall but Holthaus said that "sustained market growth in 2019" had outpaced Intel's efforts and "exceeded third-party forecasts."

However, she then said that Intel had experienced "production variability" in the fourth quarter, which had caused shipment delays. She said that Intel representatives were getting in touch to answer questions about the delayed shipments. Holthaus did not go into further detail as to why production had varied, presumbly down.

A year before CEO Bob Swan had issued a similar open letter that blamed strong demand for a production shortfall and said increasing capex and volume production of 10nm FinFET process in 2019 would help address the issue.

At the beginning of 2019 foundry chip maker TSMC lost production because it used a batch of photoresist that was not to specification and which it ultimately had to write down as a cost of $550 million. It is not known whether a similar production glitch has hit Intel.

Related links and articles:

www.intel.com

News articles:

Intel blames production shortfall on strong demand

Report: Intel to outsource 14nm chip production to TSMC

Intel plans for more manufacturing in Ireland, Israel, Oregon

TSMC hit for $550 million by sub-standard photoresist


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