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Can Intel Keep Up With Growing PC Demands?

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Intel interim CEO Bob Swan has stated that they have enough supply to meet the demands of consumers who are looking to upgrade or purchase PCs, but do they?

With Windows 10 being adopted more in the corporate sector, there has been a growing demand to upgrade aging PCs. Furthermore, gaming on PCs continues to grow as highly publicized professional players increasingly make PCs their platform of choice. The problem is that this unexpected growth had raised concerns that Intel would not be able to keep up with the growth. According to Swan, while supply is tight, they will have enough to meet the demand outlook for this year.

“Now for the challenge… The surprising return to PC TAM growth has put pressure on our factory network,” stated Intel Corporation CFO and Interim CEO Bob Swan in a press release. “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 unexpected growth, Intel has also stated that they will be making the following strategic changes:

  • We are investing a record $15 billion in capital expenditures in 2018, up approximately $1 billion from the beginning of the year. We are putting that $1 billion into our 14nm 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 are making progress with 10nm. Yields are improving and we continue to expect volume production in 2019.
  • We are taking a customer-first approach. We are working with your teams to align demand with available supply. You can expect us to stay close, listen, partner and keep you informed.

While many activities such as banking, email, communication, and web browsing have moved from the PC to mobile devices, PC gaming has become very popular due to games like Fortnite and PUBG. If you have a child who plays Fortnite or PUBG, then you probably know that they may spend as much time watching YouTube and Twitch streams as they do playing the games themselves.

Many of these professional players have chosen a PC as their weapon of choice and their fans want to follow in their footsteps. Needless to say, the growing demand for next generation hardware will cause an increase in price for both Intel and AMD products until production levels can be increased to meet this demand.

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