Intel releases impressive Q3 financial report, 14 nm shortage expected to get worse

It looks like Intel was caught off-guard by outstanding market demand for its Coffee Lake CPUs, which lead to impressive revenues in Q3 2018 and also the CPU shortages. (Source: Engadget)

The Santa Clara giant reported the best quarter in its entire 50-year history, even though the company was not able to meet the outstanding market demand. The 14 nm shortages will continue throughout the rest of the year and Intel expects this situation to worsen, as it is slowly shifting focus to the 10 nm node.

by Bogdan Solca, 2018/10/26

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Despite the technical difficulties that lead to shortages for some 14 nm CPU models, Intel’s Q3 financial report was the best one in the company’s entire 50-year history. Interim CEO Bob Swan stated that Intel expects more severe shortages in the coming months, but all is going according to plan with the 10 nm node, so the first CPUs using this manufacturing process should be launched in late 2019.

As far as financial figures are concerned, Intel reported a record US$19.2 billion in revenues for Q3 2018 (up 19% year-over-year), while the net income is sitting at US$6.4 billion (up 34% year-over-year). Intel is expecting around US$71.2 billion total revenues for 2018, even though the shortage problems might interfere with these projections.

Regarding the ongoing shortage problems, Swan mentioned that “in Q3, largely a function of customer collaboration in our fabs, I don't think we were too terribly constrained on the PC side, to be honest with you. I think as we're going into Q4 is where […] the constraints are impacting us a little bit more… we were caught off guard a little bit this year by explosive growth well ahead of what our expectations were back in the beginning of the year, and that growth came from all different segments of the business. It put us in the unfortunate situation of constraining some of the demand signals that we were seeing from the market and our customer base.”

Intel has already started to migrate 10 nm manufacturing equipment to its 14 nm facilities in order to better meet the scheduled launch for late 2019. This move apparently impacted some of the 14 nm production, but Intel is working on finding solutions.

AMD is preparing to launch its 7 nm chips in early 2019, and Intel is clearly under pressure. Asked about the 7 nm process, Intel’s chief engineering officer Murthy Renduchintala said the company has not yet set a delivery date, but the node is under development.