The shortage of chips and components has plagued the high-tech industry for several quarters. Although semiconductor companies and their peers are investing in increasing manufacturing capacity, there is no light at the end of the tunnel. This week, Intel warned that there will be an unprecedented shortage of consumer PC chips in the third quarter.
Intel’s Chief Financial Officer George Davies said: “Continuing industry-wide component and substrate shortages are expected to continuously reduce CCG revenue. Intel Q2 2021 Conference call with analysts and investors (adopted Find Alpha). “We expect the supply shortage will continue for several quarters, but it seems to be particularly serious for customers in the third quarter. In the data center, we expect enterprises, governments and cloud computing to recover further in the third quarter.
Just a few years ago, due to the huge demand for Xeon and high-end Core CPUs, Intel had problems producing enough silicon wafers in its fabs, so it expanded its manufacturing capacity.Today, Intel has sufficient semiconductor production capacity to produce products that use both 10nm and 14nm manufacturing processes, but there is another obstacle in terms of packaging chips: insufficient Ajinomoto Composite Film (ABF) Substrate supply.
This Best CPU And other modern processors and chipset The use of laminated packaging and insulation-based chip substrates is provided by only one company, Ajinomoto Fine-Techno Co.Although Ajinomoto can provide more or less thin films, the actual IC substrate manufacturers cannot meet the needs of all customers and become a bottleneck for various chip manufacturers and chip packaging plants. Earlier this year. Intel has its own testing and packaging facilities, but it is clearly unable to obtain enough substrates.
Davis said: “We did a very good job of eating a lot of substrates, and we think we can get some of them in the third quarter.”
As people return to the office and students return to school, demand for PCs usually peaks between September and November. But as PC manufacturers build systems for the back-to-school season and holidays, demand for components began to increase in the second half of June, and peaked between August and September. Due to the limited substrate production and packaging capabilities of Intel (and its partners), their shipments to PC manufacturers (and channels) will be limited, and demand will rise. Therefore, the shortage of CPU, chipset and other components of client PCs is expected to be severe in the third quarter of 2021.
For long-term contracts and profit considerations, Intel must prioritize shipments of its Xeon processors for data centers. Since Intel’s Xeon CPUs are physically larger than Intel’s client CPUs, shipping one of such data center chips means that three or four client chips cannot be shipped.
To ensure that sufficient substrates can be obtained, Intel has Invest in ABF substrate manufacturer It also installed some equipment to complete the production of ABF substrates in its own packaging facility.
Intel is full of hope for the fourth quarter.
“In the third quarter, we can see that we have encountered a real supply challenge, which is severe,” Davis said. “But in the fourth quarter, we are doing everything we can to help our substrate suppliers increase their supply, including completing some of their manufacturing in our own facilities. This is something we can do as IDM.”