Buyers should contact suppliers as Intel announces chip delay

27 July 2020

Intel has pushed back production of its next-generation computer chips to 2022, 12 months behind schedule.

Intel’s CEO Bob Swan told investors the firm had “identified a defect” in its seven nanometer (nm) chips that had caused the delay.

The production on the chips, which was meant to be launched by the end of 2021, is “approximately twelve months behind”, Swan said. 

Buyers have been warned that the delays could impact those planning on transitioning to lower power devices. 

Swan said Intel had “invested in contingency plans to hedge against further schedule uncertainty”, such as outsourcing some manufacturing to third-parties. 

“We’re mitigating the impact of the process delay on our product schedules by leveraging improvements in design methodology such as die disaggregation and advanced packaging,” he said. 

Last year, Intel issued an apology to its customers after it had issues meeting demand for its chips. Tech firms were told sustained market growth had “outpaced efforts and exceeded third-party forecasts”.

In June, Apple announced it aims to transition from Intel chips in its Macbook and desktop computers to its own “Silicon” chips within two years, reducing its dependence on Intel. 

Ian Nethercot, supply chain director at Probrand, told SM other tech firms were likely to follow suit as Intel has faced supply problems for over a year. 

“It seems that these vendors are now willing to take matters into their own hands and look to make chips that are more powerful and provide better performance than Intel can offer them.”

Nethercot added the delays to Intel’s chips could slow down firms' plans to transition to lower power devices.

“One of the key benefits of 7nm chips is the reduction in power usage of the device so if businesses have a procurement plan to transition existing equipment to newer, lower power devices, then this will cause setbacks in those plans.

‘‘Buyers should consider other technology options in the market that are available to them now. Talk to suppliers about your projects and strategies and come up with solutions that will work to achieve your goals. The more forward looking you are, the better. It is important to keep in regular contact with your suppliers regarding your road map of internal projects. Lean on suppliers for support with sourcing stock and offering alternative solutions.’’

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