Leading chipmaker Intel Corp is in a tight spot, and that is proving to be advantageous for arch-rival AMD Inc. The former issued an apology to the buyers for the supply constraints. The chip giant elaborated on the recent manufacturing challenge that is taking a toll on production and supply. An Intel spokesperson admitted recently that the company is yet to emerge from the crisis, and that is affecting its sales target too. Investors were, however, not much ruffled by the revelation, and they seem to be assured by Intel’s forecast for additional revenue for the year. The stock price of Intel has not got affected adversely, as well.
The industry experts are also not looking at the situation with a negative outlook. Moor Insights & Strategy’s principal analyst, Pat Moorhead thinks Intel should be able to meet its commitments, from the financial perspective. Intel CEO Bob Swan earlier admitted about the issue plaguing production and supply more before. Swan said in an event last month that the PC demand had surpassed expectations. The company is still finding it hard to build inventory buffers. However, he added that the company is striving to restore the supply/demand balance. Michelle Johnston, the marketing VP of Intel, also posted a letter on Intel’s website addressing the customers. This supply and production shortfall of Intel likely carry into the 1st quarter of 2020.
While Intel is trying hard to resolve the production hurdles and trying to retain the customers, it is a rival AMD that will benefit. Tirias Research’s principal analyst Kevin Krewell said AMD might gain from it, but that may not be a considerable gain. The OEMs usually do not shift sides overnight, and many Intel loyalists may prefer to wait for a few more months. The company is making a transition to 10nm chips from the existing 14-nanometer generation chips. It is also likely that Intel may hire contract manufacturers to make more chips in the period at other locations.