Intel isn’t making enough processor chips to meet demand and that will be a problem for PC sales this holiday quarter, according to J.P. Morgan.
The firm estimates the Intel processor and chipset shortage will hurt fourth-quarter PC shipments by 5 percent to 7 percent.
“Our conversations with PC vendors indicate that the shortage, which started in small magnitude in 3Q, has been progressively worsening and is likely to have the maximum impact in 4Q18,” the firm’s Asia Pacific technology analyst Gokul Hariharan said in a note to clients Friday. “We expect this to affect both notebook and desktop PCs and likely to have a higher impact on commercial and high-end consumer PCs, where using AMD or older Intel family of CPUs as substitutes are more difficult.”
Intel shares are up 0.7 percent Friday.
Hariharan believes Intel may have already converted some of its 14 nanometer manufacturing capacity in a transition to the 10 nanometer process. Unfortunately the chipmaker has announced a delay in moving to its next-generation manufacturing technology to holiday 2019, which may be crimping overall chip production, according to the analyst.
One nanometer equals one-billionth of a meter. Smaller nanometer chipmaking technologies historically have allowed companies to create faster, more power-efficient chips.
The analyst said Intel’s manufacturing issues will likely benefit its primary competitor in PC processors. AMD expects to launch its 7 nanometer processor chips next year.
“We see rising interests in AMD adoption in the next cycle from PC OEMs given recent Intel CPU supply concerns,” he said.
In July, technology research firm IDC reported global PC second-quarter shipments rose 2.7 percent year over year, which marked the highest quarterly growth rate in more than six years.
Intel shares are down 1.3 percent this year through Thursday, while AMD’s stock is up nearly 200 percent in the same time period.
Asian media outlet Digitimes earlier reported the Intel chip supply and manufacturing issues on Aug. 31, which is now corroborated by J.P. Morgan’s research.
Intel did not immediately respond to a request for comment.