Thursday, November 28th 2019

Dell Calls Out Intel for CPU Shortages Affecting its 2019 Full Year Revenue Forecast

PC major Dell in its quarterly results call blamed Intel for cuts in its revenue forecast for 2019 (full year) sales. "Intel CPU shortages have worsened qtr-over-qtr, impacting our commercial PC and premium consumer PC Q4 forecasted shipments," said Dell COO Jeffrey Clarke. Intel's CPU shortages are caused due to demand in the PC and server markets significantly outpacing supply, and not because Intel is supplying below its capacity. The company increased its capex toward manufacturer by $1 billion YoY, retrofitting its manufacturing facilities to make 14 nm processors, all while juggling resources to execute its 10 nm rollout for high-volume mobile and high-margin server processors.

The company hasn't launched 10 nm desktop or HEDT processors, yet, and is reportedly preparing yet another 14 nm line of processors for these platforms, codenamed "Comet Lake." This microarchitecture has also seen a mobile rollout for mainstream mobile form-factors, while Intel focused 10 nm "Ice Lake" for ultraportables and ultra low-power form-factors. Intel executive VP for sales Michelle Johnston Holthaus recently wrote a letter to its customers (primarily companies like Dell,) informing them that despite their best efforts, demand continues to beat supply, and that they hadn't managed to solve their supply issues.
Source: Reuters
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28 Comments on Dell Calls Out Intel for CPU Shortages Affecting its 2019 Full Year Revenue Forecast

#1
Khonjel
Heh. If only these companies had the foresight of not taking bribes and diversify supplies. Oh wait PC = Intel Inside.
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#2
fancucker
Does anyone have hard evidence of bribery or is it just ayymd conspiracy theories? Plus the majority of their customers are committed to Intel systems, to avoid teething issues in updating or because of performance advantages in certain applications. Its as simple as that.
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#3
Hossein Almet
How comes? One survey after another, all say 'sales of PC have been down and down'.
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#4
R-T-B
fancucker
Does anyone have hard evidence of bribery or is it just ayymd conspiracy theories? Plus the majority of their customers are committed to Intel systems, to avoid teething issues in updating or because of performance advantages in certain applications. Its as simple as that.
I mean, teething issues in updating were worked out on like... First Gen Ryzen really.

But no, there is no hard evidence of bribes. Just as there is no hard evidence vendors won't go AMD if supply does not pick up.
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#5
evernessince
fancucker
Does anyone have hard evidence of bribery or is it just ayymd conspiracy theories? Plus the majority of their customers are committed to Intel systems, to avoid teething issues in updating or because of performance advantages in certain applications. Its as simple as that.
Yes what could be worse then teething issues other then having to patch or upgrade 100% of your Intel systems due to major security patches every month, oh wait!!

"Performance advantages in certain applications"

There aren't many apps Intel still wins in and that's before you consider the higher TCO of Intel. I'd put the number of companies with Intel only optimized software at less then 10% marketshare.

I wouldn't call it bribery without evidence but it certainly is odd that a company is taking a loss in sales by their own choice. That same company just so happens to have been convicted and paid a fine in the past as well. Dell certainly possess the appropriate Mens Rea to commit such an act.
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#6
notb
Well, Intel upgrades plants to 10nm instead of building new ones.
Problems should be over next year. All 10nm plants will achieve full potential, while Samsung/TSMC will take some of the load.

Lets hope they've learned something for the 7nm transition...
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#7
saikamaldoss
I know it’s bad to say it.. but ya I am happy. You really deserve it. I have tried to purchase 1600 laptops with AMD 3700u laptops and always they force me to get laptops with intel 8250u or 8350u or some intel stuff. Same applies to mini or micro PC. They were always on intel side. It was so evident. I finally gave up and I asked our procurement to go back to Lenovo. eveb HP is more intel biased.. but for power users we had to go intel thanks to stupid AMD not having anything to compete against 9750H :/.
Major business for intel is Microsoft surface and performance laptops for offices.. AMD is a bit slow on this side of things.. hope that changes in 2020..

For my personal use, I am waiting for past 6months hoping 4000series will have a 6/12 cpu or more powerful one on 7nm.. I wanted to buy G7 but it’s only available with 9750H or 8750h or 8300H or 9300H
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#8
notb
Hossein Almet
How comes? One survey after another, all say 'sales of PC have been down and down'.
Only home PC sales are down.
Business PC sales are stable (because office worker needs a PC - that's it).
Server sales are up in long term.
Khonjel
Heh. If only these companies had the foresight of not taking bribes and diversify supplies. Oh wait PC = Intel Inside.
Try to remember these are not DIY desktops we're talking about. It's not about "diversifying supplies".
You have to design a PC for each platform. They all cost.
Intel has 90% of the market, so it's pretty obvious that OEMs focus on Intel's CPUs.

And these shortages are relative. Yes, Intel can't provide enough CPUs for current demand. But they still make many times more than AMD can.

Also, foresight?
Ryzen 1 wasn't interesting. Ryzen 2 was fine. Ryzen 3 is good, but APUs aren't out yet.
Once Zen2 APUs are out (both mobile and desktop), OEMs will likely use them.
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#9
Frick
Fishfaced Nincompoop
fancucker
Does anyone have hard evidence of bribery or is it just ayymd conspiracy theories? Plus the majority of their customers are committed to Intel systems, to avoid teething issues in updating or because of performance advantages in certain applications. Its as simple as that.
Well, there was this a decade ago:
The Commission found that Intel engaged in two specific forms of illegal practice. First, Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. Intel also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs. Such rebates and payments effectively prevented customers - and ultimately consumers - from choosing alternative products. Second, Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors' x86 CPUs and to limit the sales channels available to these products.
I believe that is what people are referring to when talking about bribes. Seems like a done deal. But then this happened (and here):
The EU’s top court ruled that Intel’s appeal had to be re-examined by a lower tribunal, criticising judges for failing to properly analyse the economic aspects of the case in its 2014 decision to reject the chipmaker’s initial challenge.
The lower court “was required to examine all of Intel’s arguments” regarding a test to check whether the rebates used by the company was capable of harming competition, the EU Court of Justice in Luxembourg said on Wednesday.
The lower tribunal – the EU General Court – has to examine “whether the rebates at issue were capable of restricting competition”.
The ruling shows that it cannot be taken into account that dominant companies’ exclusivity discounts are always restrictive. There is an assumption that the discounts are restrictive, but the company may present proof which may lead to the opposite conclusion. When companies present proof supporting that conduct is not suited for restricting competition, the competition authorities and subsequent appeal bodies must investigate the arguments.

For dominant companies, the ruling means that it is possible to defend exclusivity discounts, but it is for the dominant company to prove that the discounts do not restrict competition and exclude competitors from the market.
And then it gets murky. When is a bribe not actullay a bribe? I assume they are still working on it. I would definitely argue that it was a bribe at the time (mid 2000's IIRC), when AMD totally rocked their Athlon stuff yet few OEM's actually used them AND at the same time Intel made exclusivity deals with them, but apparently that's up for legal discussion. Note how it's not about Intel not doing the things in the first quote, but about whether it actually hurt competition.
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#10
fancucker
Frick
Well, there was this a decade ago:



I believe that is what people are referring to when talking about bribes. Seems like a done deal. But then this happened (and here):




And then it gets murky. When is a bribe not actullay a bribe? I assume they are still working on it. I would definitely argue that it was a bribe at the time (mid 2000's IIRC), when AMD totally rocked their Athlon stuff yet few OEM's actually used them AND at the same time Intel made exclusivity deals with them, but apparently that's up for legal discussion. Note how it's not about Intel not doing the things in the first quote, but about whether it actually hurt competition.
So essentially competitive deals for OEMs that the competitor couldn't offer? A bit underhanded but strictly within the realm of traditional business practice. These OEMs have to consider them alongside the pricing of products.
Posted on Reply
#11
Frick
Fishfaced Nincompoop
fancucker
So essentially competitive deals for OEMs that the competitor couldn't offer? A bit underhanded but strictly within the realm of traditional business practice. These OEMs have to consider them alongside the pricing of products.
The highlighted bit is the crux of that particular issue, and I assume that is what Intel has to prove. Also there's this bit:
Intel also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs.
I can't see how that is fine with anyone.
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#12
fynxer
Well, that's what happen when you put all your eggs in one basket.

Instead of lowering their forecast they should increase it and cover the Intel shortage with more AMD products.

Problems was written on the wall for Intel the day AMD released Ryzen in 2017, Dell stuck their head in the sand listening to Intel's repeat bullshit excuses that they where fixing the problem next quarter over and over again not knowing Intel had nothing for years to come and was only bullshitting them not to start selling AMD.

Well now they are paying the price for their ignorance, i don't trust a company like this so today Dell is on the bottom of my list to buy from unless they happen to give away their stuff for free.
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#13
laszlo
Dear Dell, you want more revenue ? buy from amd why wait after intel?
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#14
notb
laszlo
Dear Dell, you want more revenue ? buy from amd why wait after intel?
And what will they do? Sell you a dead XPS 13 without an Intel SoC, but with an AMD thrown inside the box? :D
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#15
laszlo
notb
And what will they do? Sell you a dead XPS 13 without an Intel SoC, but with an AMD thrown inside the box? :D
that's one of many options, of course :laugh:
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#16
kapone32
fancucker
Does anyone have hard evidence of bribery or is it just ayymd conspiracy theories? Plus the majority of their customers are committed to Intel systems, to avoid teething issues in updating or because of performance advantages in certain applications. Its as simple as that.
I guess you don't remember the days when Dell was the darling of the Nasdaq by beating earning estimates every quarter. Two things came out when the authorities dived deeper.

1. Intel was giving Dell money back for all of the CPUs they were selling
2. Dell was getting the money from Intel by having their staff recommend only Intel CPUs

The end of that was a $1 or $2 billion settlement from Intel to AMD to make it go away.
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#17
bmacsys
fancucker
Does anyone have hard evidence of bribery or is it just ayymd conspiracy theories? Plus the majority of their customers are committed to Intel systems, to avoid teething issues in updating or because of performance advantages in certain applications. Its as simple as that.
"Does anyone have hard evidence of bribery or is it just ayymd conspiracy theories?"


Have evidence? Do you live under a rock? Intel was convicted in court lol!

notb
Ryzen 1 wasn't interesting. Ryzen 2 was fine. Ryzen 3 is good, but APUs aren't out yet.
You are kidding I hope? Ryzen 1 not interesting? Ryzen 2 fine? Ryzen 3 "good"? If Ryzen 3 is only "good" then all Intel cpu's must suck as they are trounced in 90% of most any benchmark you can shake a stick at.
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#18
windwhirl
bmacsys
You are kidding I hope? Ryen 1 not interesting? Ryzen 2 fine? Ryzen 3 "good"? If Ryzen 3 is only "good" then all Intel cpu's must suck as they are trounced in 90% of most any benchmark you can shake a stick at.
It kinda depends on who's buying. In my case, I waited for Zen 2 mostly to get an upgrade on single threaded performance over Haswell and avoid some potential issues with the IMC, besides the 4 extra cores that I already planned on getting...
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#19
bmacsys
windwhirl
It kinda depends on who's buying. In my case, I waited for Zen 2 mostly to get an upgrade on single threaded performance over Haswell and avoid some potential issues with the IMC, besides the 4 extra cores that I already planned on getting...
According to the guys line of thinking ThreadRipper and Epyc are just "OK" Lol!
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#20
LFaWolf
I think there are other possibilities - 1, the business purchasers have not heard of AMD or are not familiar with AMD offerings, and Intel is the safe bet here, and 2, AMD has or will have trouble fulfilling all the orders as well.
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#21
Vader
I want to see AMDs 7 nm offerings for mobile. Currently their cpus are competitive against intel, but it is not a clear win as it happens in the desktop space with ryzen 3000
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#23
gamefoo21
It's why I got stuck with a 8750H instead of the 8850H I wanted
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