Intel Struggles To Meet AI Data Center Demand
(Thursday January 22, 2026 @10:30PM (BeauHD)
from the supply-and-demand dept.)
- Reference: 0180640714
- News link: https://slashdot.org/story/26/01/22/2317238/intel-struggles-to-meet-ai-data-center-demand
- Source link:
Intel says it [1]struggled to satisfy demand for its AI data-center CPUs while new PC chips squeeze margins. CEO Lip-Bu Tan framed the turnaround as supply-constrained, not demand-constrained, with manufacturing yields (18A) improving but still below targets. Reuters reports:
> The forecast underscores the difficulties faced by Intel in predicting global chip markets, where the company's current products are the result of decisions made years ago. The company, whose shares have risen 40% in the past month, recently launched a long-awaited laptop chip designed to reclaim its lead in personal computers just as a memory chip crunch is expected to depress sales across that industry.
>
> Meanwhile, Intel executives said the company was caught off guard by surging demand for server central processors that accompany AI chips. Despite running its factories at capacity, Intel cannot keep up with demand for the chips, leaving profitable data center sales on the table while the new PC chip squeezes its margins.
>
> "In the short term, I'm disappointed that we are not able "to fully meet the demand in our markets," Chief Executive Officer Lip-Bu Tan told analysts on a conference call. The company forecast current-quarter revenue between $11.7 billion and $12.7 billion, compared with analysts' average estimate of $12.51 billion, according to data compiled by LSEG. It expects adjusted earnings per share to break even in the first quarter, compared with expectations of adjusted earnings of 5 cents per share.
[1] https://www.reuters.com/business/intel-forecasts-first-quarter-sales-profit-below-estimates-2026-01-22/
> The forecast underscores the difficulties faced by Intel in predicting global chip markets, where the company's current products are the result of decisions made years ago. The company, whose shares have risen 40% in the past month, recently launched a long-awaited laptop chip designed to reclaim its lead in personal computers just as a memory chip crunch is expected to depress sales across that industry.
>
> Meanwhile, Intel executives said the company was caught off guard by surging demand for server central processors that accompany AI chips. Despite running its factories at capacity, Intel cannot keep up with demand for the chips, leaving profitable data center sales on the table while the new PC chip squeezes its margins.
>
> "In the short term, I'm disappointed that we are not able "to fully meet the demand in our markets," Chief Executive Officer Lip-Bu Tan told analysts on a conference call. The company forecast current-quarter revenue between $11.7 billion and $12.7 billion, compared with analysts' average estimate of $12.51 billion, according to data compiled by LSEG. It expects adjusted earnings per share to break even in the first quarter, compared with expectations of adjusted earnings of 5 cents per share.
[1] https://www.reuters.com/business/intel-forecasts-first-quarter-sales-profit-below-estimates-2026-01-22/
TSMC? (Score:2)
by evanh ( 627108 )
Presumably he's talking about their supply from TSMC. TSMC are, of course, overtaxed on every front.
Re: (Score:2)
by CommunityMember ( 6662188 )
> Presumably he's talking about their supply from TSMC. TSMC are, of course, overtaxed on every front.
Intel does use TSMC (notably for their discrete GPUs, and to deal with chip cadence), but primarily uses it's own fabs. At this point, no advanced lithography fab has any measurable excess capability.
Intel is beyond repair (Score:2)
by JoeyRox ( 2711699 )
Customers are throwing money at them yet they can't get their act together long enough to develop and manufacture a viable product. Intel would find a way to screw up selling sand in the desert.
Bub-ble (Score:2)
Even Intel, after years of decline, can't keep up.
I'm not a person who denies the usefulness of AI. But there is a ton of garbage ideas out there that will never pan out. But in the short term, all those garbage-AI-idea startups are still needing lots of computers and chips. But a whole lot of them will go out of business, leaving behind perfectly good hardware that can be bought up at fire sale prices. Let the good times roll, because soon, they'll be a distant memory.
Re: (Score:2)
I forecast Intel will belly up when the AI bubble crash depresses the entire IT industry.
That is unless The Orange One wants the gov't to own even more of Intel: socialism, wooopyy!
However, the backlog of people who want to buy PC's but delay due to high prices may actually give Intel a boost after the crash, as people start buying regular equipment again.
Re: (Score:2)
> Even Intel, after years of decline, can't keep up.
All fabs (TSMC, Intel, Samsung, etc.) have a fixed number of wafers they can produce per hour. Most of those wafers already have customer contracts (and most of Intel's fabs customers are Intel itself, but it is still a customer). Building new fabs takes time (and billions of dollars), and most companies do not build until they have predictions and commitments of future customers (an entirely new fab that has no customers can be a $20B white elephant). The AI demand (bubble) was not predicted with enough