"Intel's move to prioritize data center capacity is in response to a supply-demand mismatch, or rather, faulty forecasting from their hyperscaler customers who rapidly shifted to the higher core-count solution late last year,"
"Every hyperscaler customer we talked to was signaling that,"
Intel is shifting manufacturing capacity away from PC chips toward Xeon processors to support intensive AI workloads in data centers. The company acknowledged that demand forecasting for data-center products was underestimated and is now prioritizing AI-ready hardware. Rapid increases in Xeon orders across recent quarters created capacity constraints affecting third and fourth quarter supply. Industry demand for DRAM, NAND, and substrates is expanding alongside AI infrastructure growth. The reallocation will likely tighten availability of lower-end PCs in 2026 and push prices higher as production capacity focuses on high-core-count server processors.
Read at Computerworld
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