Just reading through yet another intel chip shortage article and I am kind of wondering if they are actually under that much pressure or are they forcing the market to absorb their back log.
Based on demand, we are expecting supply will remain constrained through 2020. Server platforms which use these processors are affected. In order to minimise customer impact as a result of these supply constraints with Cascade Lake processors, HPE urges customers to consider alternative processors, which are still available. We are in constant dialogue with our partners at Intel and have a strong relationship with them, and we know they are working on the issue.
HPE is pushing people to older Skylake Xeons, Cascade Lake is an evolution of Skylake, so I am wondering if this so deliberate to clear the back log of still high margin 2017 Skylake Xeons. After all they will probably sit if there is a better chip and apparently higher demand for it.
I also wonder if the servers could take a drop in CPU upgrade? Sell them the racks of old CPUs now and then sell then another CPU in a few months time when they are available. And maybe another jump to the 10nm if that is ready.
But I also wonder at what pace enterprise harware takes to spin a new platform and if HPE, Lenovo and specifically Dell will put up with it. I say Dell because they have had $1bn wiped off their estimates for the year in part due to this shortage. So would it be more worth their time to spin a new AMD platform and offer that in place of Intel just so they can continue to actually sell hardware at a reasonable rate.
This has gone in since summer '18 and looks like it will be 2021 before they are back to anything near reasonable pace to keep up. And that is just for 14nm parts, not the 10nm because those effectively don’t exist right now. It is a comedy of errors and confidence beyond reality.
We continue to focus on improving supply for our customers. We have invested record levels of CapEx the last two years to expand our capacity and increase our supply, but customer demand has outpaced these improvements. We continue to prioritise the production of our highest performance processors as we also continue ramping volume on 10nm and working closely with customers to align our available supply to their demand.
That sounds like a bad idea at this point in time. Spending record levels on bringing back 14nm when world +dog has been shown 7nm parts handily beating out now 3 year old 14nm parts. Then there is the no doubt collosal amount spent on 10nm that has yet to be seen to do much, yes there are some laptops but their money is made in servers, to the point that they are holding back laptop and desktop chips to help get server stuff out the door.
So who is snapping up all these Intel server chips? The hyperscalers. Intel cannot make enough processors fast enough for Amazon, Microsoft, Google, Facebook, and others of similar size that are constantly expanding their data center operations.
Those have historically need happy to use whatever is available fast and efficient all things that AMD and ohers are doing well at while also being available now.
Hungry for more, the hyperscalers are also looking to other CPU architectures. Amazon, Google, Microsoft, and others, continue to make noises about using AMD, Arm, Power, and RISC-V designs in their operations.
All this is just a layman reading news badly, so I am sure there will be corrections and other views.