Intel Chief Financial Officer (CFO) David Zinsner told Barron's today that the company's chip inventory is rapidly depleting as demand for server and PC processors far exceeds expectations.
He stated that data center and client CPU demand is rapidly increasing, and that the first quarter of 2026 will be the "most challenging" period to meet chip demand, as the company's chip inventory will be depleted by then.
Accordingly, Intel's "Xeon" series server CPUs are seeing a significant increase in adoption, with the Xeon 6 "Granite Ridge" chip, specifically for artificial intelligence (AI) applications, being a key driver of growth. Intel is continuing to expand its chip production lines, including those using the Intel 7 process node. However, even with this expansion, Intel still expects its chip supply to remain tight after 2026.
During the earnings call, Zinsner also mentioned, "The team performed exceptionally well in the current tight production capacity environment, meeting excess demand during the quarter. We expect this situation to continue through 2026. The company is working closely with customers to maximize available capacity, including through price adjustments and product mix optimization to optimally match supply and demand."
Based on previous reports, the "price adjustments" he mentioned here refer to the long-awaited Raptor Lake processors. Of course, the shortage isn't simply due to excessive demand, but rather the company prioritizing production capacity for server chips. To balance demand across different markets, Intel is raising Raptor Lake product prices to ensure stable supply for both the server and consumer markets.
According to DigiTimes, Intel will adjust the price of its Raptor Lake processors in the fourth quarter of this year, increasing by $20 from the current price of $150-160.
