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Intel 7 having capacity constraints

Y

Y.H

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During the earnings call, Intel announced that it currently faces a shortage of production capacity for its 'Intel 7' process node, and the company expects this shortage to "persist for the foreseeable future." That's an unexpected shortage to have, as Intel's current-gen chips use newer process nodes from TSMC instead of Intel's older 'Intel 7' node. Intel is a master at production capacity planning, so its disclosure points to an unexpected surge in sales of the older 'Intel 7' products.

Intel explained that the shortage of its 7nm production capacity is due to an unexpected surge in demand for its "N-1 and N-2" products, a reference to its two prior-generation chip families. This trend is occurring in both the consumer and data center markets.

"What we're really seeing is much greater demand from our customers for n-1 and n-2 products so that they can continue to deliver system price points that consumers are really demanding," explained Intel's Michelle Johnston Holthaus. "As we've all talked about, the macroeconomic concerns and tariffs have everybody kind of hedging their bets and what they need to have from an inventory perspective. And Raptor Lake is a great part. Meteor Lake and Lunar Lake are great as well, but come with a much higher cost structure, not only for us, but at the system ASP price points for our OEMs as well."

Bernstein Research's Stacy Rasgon pressed Holtahaus about the implications for the company's upcoming Panther Lake chips, which are set to launch at the end of the year, especially given that the looming tariff disruptions have not yet occurred.

Holthaus said the Panther Lake launch remains on track and the company expects continued success in the commercial market, which she said typically precedes broader consumer adoption. Notably, she did not directly address the company's expected next-gen AI PC adoption for consumer laptops. Regardless, the company also continues its expansive work to promote and cultivate a growing developer ecosystem to unleash the power of its AI wares.

www.tomshardware.com

Intel's AI PC chips aren't selling well — instead, old Raptor Lake chips boom

Intel's AI PC revolution will have to wait.
www.tomshardware.com www.tomshardware.com
 
I mean they did write down like $10B+ of equipment and take down a lot of intel 7 capacity because they thought they wouldn't need it. So that can't exactly help matters. For the U series, there are traditionally two types of laptop they go into. Cheap, and premium low power. MTL/ARL-U were clearly designed for premium mobile, and they aren't mainstream successors to RPL-U. LNL-V certainly isn't that, either. RPL U is like 160mm2 of i7. Meanwhile, MTL U is like 200mm2, uses mostly N6, some intel 4/3, some N5P, has a base die, and advanced packaging. Not surprising Intel wanted a higher prices on the Ultra parts so CCGs margins didn't melt down as hard as with selling LNL as the primary premium mobile offering in 2025. But the thing with laptop OEMs is that they are the cheapest people on earth and if you give them the option to skimp on something (like buying RPL-U instead of MTL-U) they will do it. So until Intel has a product they can sell at decent margins for RPL-U pricing, RPL-U will sell strongly.
 
For me it is a cost thing for consumers. The CPU is a big part of the laptop cost. I bought an Intel Core Ultra 7 with Intel graphics (N-2?) for really cheap. For what I do I need a good camera and sound for Zoom more than CPU/GPU processing power.
 
Y.H said:
But didn’t raptor lake had some instability issues some time ago ? And now they are doing very well in sales
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Yes.

Intel's 13th and 14th generation "Raptor Lake" CPUs experienced instability issues due to elevated operating voltages, causing crashes and blue screens, particularly when running games. The issue stemmed from a "Vmin Shift Instability" in a clock tree circuit, which was vulnerable to reliability aging under high voltage and temperature. Intel addressed the problem with microcode patches and a two-year warranty extension for affected chips.

Intel had to RMA many, many parts (I haven't seen them announce the number or the cost of this).

At first, Intel blamed users. Then they blamed board manufacturing partners. But eventually they said it was their fault and issued multiple software "fixes." Intel said that these software fixes would not be be helpful for CPUs that were already seeing failures -- those parts would have to be replaced. Data Center companies talked about how these Intel CPUs had much higher failure rates. (but not many went on the record)
 
Raptor lake is all the power anyone needs. it also is the old socket/chipset. Mature, inexpensive for ODMs/EMS companies

the margins are also better for Intel on Intel 7 than on Intel 4....
 
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MKWVentures said:
great info. When "AI" processors came out we showed some benchmarks where the NPU TOPS was not really that impactful.
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I think Raptor Lake is quite good. I have three of them (13500, 13600K, and 14700K) and have not experienced any issue. The fixes are all done. There have been no more updates from motherboard manufacturers since a few months ago. Both CPUs and motherboards are affordable at the moment.

I think Arrow Lake desktop refresh is tempting if Microsoft fullfills its promises regarding Copilot Plus.

Pather/Nova Lake should also be quite good. That possibly enables applications like Vibe coding on a laptop format without a GPU. At the moment, Raptor Lake plus B580 should be quite a good combination for AI applications.
 
The truth is, Intel is offering HUGE discounts on Raptor Lake to all computer brands, system builders, and project-based customers. They have no choice, otherwise their fab utilization would fall, leading to even greater financial losses.
 
VCT said:
The truth is, Intel is offering HUGE discounts on Raptor Lake to all computer brands, system builders, and project-based customers. They have no choice, otherwise their fab utilization would fall, leading to even greater financial losses.
Click to expand...
They said it was a surprise. But anyways, that helps margin than printing Arrow Lake from TSM. Meanwhile, they are ramping 18A for Panther Lake, Nova Lake, and CWF that can meaningful help margin.
 
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