Intel is shifting some of its consumer processor manufacturing capacity toward server CPUs, as AI demand outpaces what the company can produce. Its CEO, Lip-Bu Tan, describes the situation as one of the most significant supply shortages in history, while the consumer PC market keeps shrinking and server demand keeps growing.
The immediate priority is ramping up production of Granite Rapids-based Xeon 6 processors. To that end, Intel is expanding its Fab 24 in Ireland, speeding up equipment installation at Fab 62 in Arizona, and converting resources in Oregon from the 18A process, originally planned for Panther Lake PC processors, to Intel 3 production for data centers, with that additional capacity expected in the second half of 2027.
The bottleneck is not limited to wafers: advanced packaging materials are also in short supply, particularly substrates, and the company expects around 40% more substrate capacity in the second half of 2027. Intel therefore expects the shortage to remain especially severe in the first half of 2027, with relief starting in the second half of the year.
Source: Notebookcheck (https://www.notebookcheck.net/Why-make-PC-CPUs-when-there-s-no-memory-Intel-shifts-production-to-server-chips.1439028.0.html)
