Delayed CPU Production Could Hinder Intel’s Mission to Regain Market Share
Intel may have set its mission to ramp-up its FY21 semiconductor production a little too high. Intel’s new CEO Pat Gelsinger set out to gain more market share in global chip production by improving turnaround efforts and close the gap in its component releases against other chipmakers (particularly in the data-center chip sector). However, just as Q3 2021 started, Intel CVP Lisa Spelman announced the production of its latest component, the Sapphire Rapid CPU, had been delayed.
Production of Sapphire Rapid, the next generation of CPUs in Intel’s server roadmap, was supposed to begin in Q4 2021. The announcement stated production was pushed to Q2 2022. These next generation chips were set to help Intel compete head on with AMD in CPU production, but the delay may hinder the efforts to regain market share.
The expected availability of Sapphire Rapid could be pushed to the end of Q2 2022 or as late as Q3 2022. The announcement added to constraints already seen in the predecessor families, especially Cascade Lake and Cascade Lake (R). Market trends indicated some customers bypassed purchasing Ice Lake, which might have been because of the expected release of Sapphire Rapid at the end of FY21 (both Ice Lake and Sapphire Rapid require new motherboards). The announcement led to increased demand of Cascade Lake (R), which saw a spike in prices following the announcement of the delayed Sapphire Rapid CPUs.
While quick turnaround on a high-quality product is what every company should aim for, it could be Intel’s shortcoming in its attempt to regain market share. The “loss of competitive edge” in recent years allowed companies like AMD to take advantage of Intel’s position in the data-center chip market, which could thwart Gelsinger’s mission for Intel.