Wafer production increased by 25%, still unable to meet market demand in the fourth quarter

Intel CEO Bob Swan (Bob Swan) told analysts and investors on Thursday’s company conference call that compared to 2018, its 14nm monthly wafer startup (WSPM) increased by 25% in 2019. In the first three quarters of this year, the company spent US$11.5 billion in capital expenditures to purchase new production equipment, and now expects its full-year capital expenditure to reach US$16 billion, which is US$500 million higher than expected.

In addition to increasing 14nm production capacity, Intel is also preparing to use its 10nm technology to increase chip production, and will begin using its 7nm process to manufacture enterprise-level GPUs in 2021. Although starting to increase the number of 14nm wafers every month is a very good news. It is worth noting that a 25% increase in the number of wafers does not necessarily mean a 25% increase in CPU output. The demand for processors with higher core counts and larger die size means that Intel must produce more wafers in order to maintain the number of CPUs it can deliver. It is difficult to estimate whether a 25% increase in WSPM is sufficient.

But Intel itself stated that although CPU shipments will increase, it still cannot meet the processor demand of its PC customers in the fourth quarter. Intel expects PC customer processor supply in the second half of the year to increase by double digits over the first half. The demand for personal computer processors has exceeded Intel and third-party forecasts, and it now believes that the market is stronger than its forecast in the second quarter, which has caused the supply to fail to meet demand. Intel is working hard to restore the balance of supply and demand.

Intel expects to finally catch up with total demand in 2020, because it will increase 14nm processor production capacity, but currently it will give priority to the production of Xeon and advanced Core i5/i7/i9 processors.