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Intel shifts production capacity from consumer to server CPUs in face of 'unprecedented' AI demand

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Intel shifts production capacity from consumer to server CPUs in face of 'unprecedented' AI demand

Although the consumer PC market is shrinking and will continue to shrink in the coming quarters, Intel is confident that the overwhelming demand from the AI industry for everything that can compute or store data will offset declines in the client space. To that end, the company is reallocating some of its capacity from client to data center CPUs, expanding its Fab 24 in Ireland to make more Xeons, has begun equipment installation into Fab 62 in Arizona ahead of schedule and vows to make 18A chips there, and is expanding its advanced packaging capacity in New Mexico and Malaysia.

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"The industry continues to navigate one of the most significant supply shortages in history, driven by the unprecedented demand for Super Intelligence," said Lip-Bu Tan, chief executive of Intel, during the company's earnings call. "Against this backdrop, I am pleased by the progress we made growing our server supply in Q3. I am mindful about the ongoing challenges we face in the future quarters to keep pace with server demand."

Intel's manufacturing expansion comes as demand for server processors continues to exceed supply despite substantial production increases over the next several quarters.


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