[The Exiled]

ASUS Comments on Intel CPU Shortages to Persist Through Q2 or Q3 2019

As it turns out, the situation is tough in both cases: tight supply will persist for quarters, whereas the trade feud may force ASUS and other companies to relocate its production facilities from China to other countries. As reported, high demand for high-profile products has increased pressure on Intel’s factory network and forced the chipmaker to prioritize fabrication of its high-margin large-die Core and Xeon CPUs over other products in the recent months. Consequently, shipments of entry-level products made using 14 nm process technology are tight right now. In a bid to tackle the problem, Intel is in the process of allocating $1 billion to boost production of chips at its manufacturing facilities located in Oregon, Arizona, Ireland, and Israel. Meanwhile, it takes months to install new equipment into fabs, so any new step-and-scan tools acquired this quarter will unlikely have any impact on fab throughput until end of Q1 next year. ASUS certainly knows about that and admits that it expects tight supply to persist till Q2 or Q3 2019.

When asked whether ASUS could offset shortages of Intel processors with AMD chips, the company said that it would certainly use more CPUs from AMD, but mainly for markets where acceptance of such products is high enough. Another pressing issue that ASUS management had to address is of course the ongoing trade conflict between the U.S. and China. The short-term problem that ASUS is facing is currency fluctuations and the need to hedge risks, which has an effect on already thin profit margins. However, longer-term problems could be far more challenging. As for impact on pricing of ASUS-branded hardware, the head of the company said that the manufacturer would make its best effort to maintain its market leadership in a bid to be able to determine prices. In fact, the company stressed that a plain increase of notebook prices would not work without increasing their value for the end user, particularly in well-developed regions like Europe and the U.S.

Izvor: AnandTech