back to article Intel server chip shortages continue to bite: HPE warns of Xeon processor supply drought for the whole of 2020

Hewlett Packard Enterprise has warned the industry-wide 18-month-plus shortage of certain Intel Xeon server-class processors may continue all the way through 2020. There are "supply constraints" on Intel Cascade Lake parts until at least April, and the chip manufacturer "recommends steering" customers to Skylake, HPE told its …

  1. Pascal Monett Silver badge

    "AMD's share price is at a record high, and has more than doubled in a year"

    Go AMD !

    For sure, Intel is handing AMD the market now. Intel doesn't want to lose the big four, but it is certainly not gaining traction elsewhere. AMD is perfectly poised to scoop up a larger share of the market and I can only hope that it reaps all the rewards that it can.

    That said, this scuffle is in the server market. Consumer-oriented chips are just as available as before, right ? Intel doesn't just make Xeons, there's the entire iX family (i3, i5, i7 and i9). Those aren't being hit by any major restriction, right ?

    Intel will keep making money hand over fist, and AMD will have a bit more room to grow. That's good news everywhere.

    1. LDS Silver badge

      "Those aren't being hit by any major restriction, right ?"

      Did you read the article? "keeping as many high-margin, high-end server chips rolling off its 14nm fabrication lines as possible, to the detriment of desktop and mobile parts". (bold mine).

      Moreover there should be some reason if all the big players want Intel parts and not AMD ones...

      1. Cuddles Silver badge

        Re: "Those aren't being hit by any major restriction, right ?"

        "Did you read the article? "keeping as many high-margin, high-end server chips rolling off its 14nm fabrication lines as possible, to the detriment of desktop and mobile parts". (bold mine)."

        And it's worth bearing in mind that the same applies to AMD, with TMSC's 7nm fabs being fully booked as well. Things would be looking a lot worse for Intel if AMD had been able to take up all the slack.

      2. Anonymous Coward
        Anonymous Coward

        It takes a lot longer to qualify servers

        That probably has a lot to do with Intel still being able to sell all the big expensive chips they can make. Once the floodgates of AMD based servers start coming out of the big OEMs, Intel won't be able to push those.

        They already recently announced some huge price cuts in certain server CPUs where AMD is starting to make inroads, but the most expensive ones are the ones with all the RAS features which also take the longest to do through testing and qualification. I'm sure there are some prototypes in customer hands already, so the clock is ticking.

        1. eldakka Silver badge

          Re: It takes a lot longer to qualify servers

          That probably has a lot to do with Intel still being able to sell all the big expensive chips they can make. Once the floodgates of AMD based servers start coming out of the big OEMs, Intel won't be able to push those.

          Not to mention that switching to another processor supplier can be a costly process that can can take years to accomplish for a big shop. You have to have new vendor arrangements, supply chains, and so on. It costs money to design new systems, so OEMs won't have sunk a lot of cost previously into developing AMD platforms since a single 'wondr chip' a long-term, sustainable business does not make.

          However, now they are. ASUS have developed a swag of optimised (rather than cheapest junk they can get away with) AMD-based desktops and laptops, other OEMs are following suit.

          Also, big players, these hyperscalers, would also want to see a pattern of long-term Zen improvements. They don't care if someone one year can deliver the best CPU ever, if next year they can't deliver a new, improved iteration, and the next after that also. They want to be able to go back for years - decades - to the same supplier and get new, improved iterations every year, like they have been with Intel. Now that AMD have delivered two successive generations of server parts, and look on their way to delivering a third, only now will hyperscalers start to gain confidence in AMD for the long haul and thus consider AMD.

          1. Anonymous Coward
            Anonymous Coward

            Re: It takes a lot longer to qualify servers

            Back in 2005/06 we had no problem at all or complications in jumping to AMD across the board - just as intel started to stage a comeback on price/performance. AMD is playing it careful because to take on too many fabs and getting burned is expensive. Tough balancing act to pull off.

            1. Mark #255

              Re: It takes a lot longer to qualify servers

              Just before Christmas, at my org, a missive from Purchasing/IT was sent round to the effect that new desktop/laptops would be constrained due to the Intel shortage (effectively 8-week lead time).

              There is, evidently, a size of organisation which is big enough to pre-select (and enforce) "blessed" SKUs, but too small to quickly pivot to a readily-available alternative.

              Which is annoying, 'cos I'd quite like a Ryzen laptop.

    2. Anonymous Coward
      Anonymous Coward

      Re: "AMD's share price is at a record high, and has more than doubled in a year"

      "Intel doesn't want to lose the big four"

      It's not the big 4 - its the "Super 7 plus 1".

      Alibaba, AWS, Azure, Baidu, Facebook, Google and Tencent all take > 1 million CPU's each per year. AT&T are the "plus 1" and have a similar demand.

      HP and Dell are around half those numbers (based on unit shipments) but its hard to negotiate when you have so much competition....

      1. Zolko Silver badge

        Re: "AMD's share price is at a record high, and has more than doubled in a year"

        "Alibaba, AWS, Azure, Baidu, Facebook, Google and Tencent"

        funny, I don't use any of those. Well, some YouTube sometimes when a link to a funny video is sent me

        1. MJB7

          Re: "I don't use any of those"

          You probably do you know. Perhaps not directly, but it is very likely that some of the companies you interact with use AWS, Azure or one of the other cloud suppliers for some of their servers.

    3. steven_t

      iX shortage

      In December, I ordered some Intel NUCs, only for our supplier to cancel the order in January due to an unexpected chip shortage. They couldn't source the i5 or i7 parts, so I had to settle for i3s.

      Maybe our supplier is to blame for accepting an order they couldn't fill, but it demonstrates that the shortage is affecting the iX family, as the article suggests.

    4. This post has been deleted by its author

    5. Anonymous Coward

      @Pascal Re: "AMD's share price is at a record high, and has more than doubled in a year"

      I don't know that you would say that they are handing AMD the market.

      Intel is focusing on their largest customers and most stable purchasers.

      Remember there is still the marching lemmings who believe that the future is in the clouds.

      So the on-prem customers who's purchases are not always planned will take the hit.

      In terms of AMD vs Intel... depends on what you want to do.

      Most companies already source hardware from multiple vendors just so that there isn't a reliance. The question is if you can match processor to processor in terms of actual capabilities.

      1. NetBlackOps

        Re: @Pascal "AMD's share price is at a record high, and has more than doubled in a year"

        With minor exception, EPYC is matching Xeon part do part at less cost in testing and I'm an Intel loyalist, until now.

        1. Anonymous Coward
          Anonymous Coward

          Re: @Pascal "AMD's share price is at a record high, and has more than doubled in a year"

          I'm suggesting anything about AMD bad or good.

          IMHO the issue of AMD and Intel gets down to what works.

          My point was that Intel wasn't ceding market to AMD.

          And not that AMD being a competitor is a bad thing.

  2. Sgt_Oddball Silver badge

    Why are the big box shifters...

    Not pushing AMD chips more then? Surely EPIC should be lapped up and pushed hard to the customers as a genuine alternative or is it because of virtual environments not allowing ease of guest OS shifting from Intel to AMD without spinning it down first? (I remember it being an issue when using veem to fling guests between servers but it's been a few years since I was allowed to play with multiple servers over different generations of cpus so I don't know if this has been solved yet)

    1. Anonymous Coward
      Anonymous Coward

      Re: Why are the big box shifters...

      "Not pushing AMD chips more then?"

      A combination of building a platform, customer demand/trust and then 6-12 months to see the sales figures.

      Naples established the platform, Rome started to build demand and Naples has provided a competitive platform but will likely take until March 2020 before we see published sales figures for Q4 2019 which will include Naples.

      And it may take until Q1/Q2 2020 (plus 3 months for public sales numbers) to really see the effects if vendors indicate their were early issues with Naples platforms.

      1. richardcox13

        Re: Why are the big box shifters...

        And that's for the simple cases: consumer/small office systems.

        For larger customers they want long term support, specific certification of application compatibility, and so forth. This takes even longer.

        As noted in the article it is starting to happen. In the case of the cloud providers, if customers start picking AMD based VMs they'll add more. IAAS and SAAS usage (where you don't choose the underlying machine) will also see use,

  3. Steve K Silver badge

    EPYC Fail...?

    EPYC Fail...?

    1. Sgt_Oddball Silver badge

      Re: EPYC Fail...?

      GAH.. Keep forgetting the marketers got involved hence the spelling.

      1. Robert Sneddon

        Re: EPYC Fail...?

        EPYC is probably trademarked, a bit like Xeon, Pentium etc. and it's a unique hit in searches. Friends refer to these short snappy made-up words (Xanax, Exxon, Linux etc.) as hooker names.

    2. John 104

      Re: EPYC Fail...?

      I think it is more likely an EPYC win...

      We have a few servers with those chips in them and they are ridiculously fast compared to our Xeon servers.

      1. Steve K Silver badge

        Re: EPYC Fail...?

        Yes - I am well aware that they are kicking Intel at last. The fail was directed at Intel.....

        Maybe I should have qualified it “EPYC fail by Intel”

  4. Anonymous Coward
    Anonymous Coward

    "For those unaware, the 14nm Cascade Lake family was launched in 2019. The 14nm Skylake Xeon line goes back to 2017."

    And how about the move to 14nm Xeon Broadwell's in 2015?

    That tells the real story - 5 years (and likely to be 6 or more) on the same process node with a few tweaks. Intel have done well to make the tweaks go as far as they have but not having a replacement by 2019 at the latest is hurting them.

  5. Anonymous Coward
    Anonymous Coward

    Who wants to buy Intel's server chips anyway as the red team are making a much better product, Archer 2 and Frontier are using AMD chips, not Intel.

  6. Anonymous Coward
    Anonymous Coward

    Itanic ?

    The good thing is more or less no-one uses Itanic anymore as I can't imagine what would be Itanium vs. Xeon in terms of priority !

    1. Anonymous Coward
      Anonymous Coward

      Re: Itanic ?

      Will no one think of the poor customers affected by the delay in moving Itanium to something below 22nm?

      I'm not sure the whether I can hear silence or Larry's distant, evil laugh... Maybe even Larry doesn't care anymore?

      1. Anonymous Coward
        Anonymous Coward

        Re: Itanic ?

        22nm? I thought they were still stuck on triple expansion steam engines.

    2. eldakka Silver badge

      Re: Itanic ?

      In January 2019 Intel announced EOL of Itanic, with last shipments July 2021.

      So of course no-one uses Itanic ;)

  7. katrinab Silver badge


    Isn't there some pretty epyc competition in the server chip market now?

    So why would anyone even want a Skylake era Xeon Silver? Performance in my experience is nothing special.

  8. Anonymous Coward
    Anonymous Coward

    Competition / 'the big 7'

    Now two things (and yes, i am working for a vendor, hence anonymous posting... :- ) ) :

    - Competition between EPYC / Intel : this battle has been fought and won by EPYC in the HPC space. It is much more difficult in the enterprise space, where the tandem VMWare/Intel rules ... as you need to create separate clusters, no VMotion, etc possible. Hence a lot of those customers are very hard to convince to move to EPYC.

    - The big xyz.... well, there i am looking directly at the IDC numbers. The 'big 7' is really weird. If you add the big server players together, Dell/HPE/Lenovo ; then ODM Direct( which assembles all that is bought by the 'big 7) is about 22% of the server market. The top 5 vendors (Dell/HPE/Inspur/Lenovo/Cisco account for 51% of the market. All of them have reported supply issues. I really think it would be a very, very bad move for Intel to put all their eggs in one basket.. and alienate their long term partners... hence i suspect they really have supply issues. And no-one is getting what they ask for.

    But that could just be me...

    1. Robert Sneddon

      High Performance Computing

      The EPCC here in Edinburgh is replacing their ageing "Archer" supercomputer which has about 10,000 12-core Xeon Ivy Bridge CPUs. However the replacement machine, also from Cray will have over 11,000 EPYC Rome 64-core CPUs, a switch away from Intel.

  9. jeff_w87

    Intel Security/Performance issues

    If you're buying a system today you should also look at the performance hits Intel has been taking lately on their various chips due to Spectre, Meltdown, etc., etc. flaws. AMD has been affected less and with the products they're putting out today, they're out performing Intel in a lot of areas so definitely worth a consideration if you can't get Intel parts.

    1. Dan 55 Silver badge

      Re: Intel Security/Performance issues

      ... and if you can get Intel parts as well.

  10. Frozit

    How much of this is Specter/Meltdown/etc?

    How much of this shortage is caused by the cloud demand for new generation side channel protected CPUs?

    Do they truly exist yet?

  11. izzylake

    How does this happen?

    Presumably these are the most profitable SKUs for Intel and they should have prioritized them with some margin of safety to avoid leaving money on the table. Bad demand planning from customers may account for some of this, but to have a full year of supply issues must mean something else has gone horribly wrong...

  12. Kevin McMurtrie Silver badge

    Write better code?

    A lot of cloud apps consume 10x to 100x the resources they should. It starts with a web app framework that prototypes well but scales very badly. It's scaled massively horizontally at low efficiency, wired together with Kafka queues, wrapped in armies of Redis clusters, sliced up into foreground and background systems, while another cluster parses billions of log entries for monitoring. Insiders consider it good because it somewhat resembles global-scale architecture, except without the throughput.

  13. Ted's Toy

    The result of a Bean counters running the Company

    Bean counters are trained to look what happened as any good bean counter will tell you. Being creative as is a bean counter is frowned upon. Creative accounting is a no no in the commercial world, but a creative engineer or planner is required to run commercial enterprise. The stock market is run by accountants thus the number of business failures one sees. Most suits fail when forward thinking is required.

  14. Anonymous Coward
    Anonymous Coward

    No "accidental" de-restricted documents this time?

    I'm surprised that HPE hasn't "accidentally" released one of their HPE Confidential or For HPE Internal and Authorized Partner Use Only documents set to public (again, they did the same thing back in Q4 2018) detailing that their sales teams should start pushing AMD units again, and have HPI join in and leave a WISE document or two set to public but marked HP Confidential or HP and Channel Partners only as well.

    If Intel cant keep a steady supply of high end parts coming, there's no reason to not "accidentally" semi-publicly declare that we're pushing the competition instead.

    Anon for the obvious reasons.

  15. Christian Berger

    Usually reports of shortages have one purpose...

    and that's to boost sales, as shortages mean that it will become harder to source something. Considering this, it also makes sense to lower the prices, this also boosts sales.

    To me it looks as if Intel wants to reduce its stockpiles of older processors.

    1. Roj Blake

      Re: Usually reports of shortages have one purpose...

      Or maybe it's HPE who have the massive stockpile of Skylakes.

  16. Jo_seph_B

    Supply and Demand

    I wonder if half of the issues were on purpose and half due to obvious issues with their 10nm tooling/production process. This has then caused a supply and demand issue, which allowed their prices to creep up, not the end of the world if you're dominating the market, which they were when this all started well over a year ago now.

    What Intel didn't account for was not only AMD coming back at them, but having a product line capable of coming back at them.

    The switch to AMD isn't hard for most, so I can't really see any major blockers to people switching. Some license costs might be high on the AMD platform due to their preference for high core counts in their CPU's. MS licensing can get pricey if using VL with cores.

    I've switched to AMD for my desktop late part of last year. First time I've used an AMD chip for about 15 years but damn its good.

  17. Kev18999

    You can blame companies that are set on Intel because of the rebate check and they are willing to wait as long as they know the check will be in the mail.

  18. msroadkill

    "Intel told us in a statement:

    We continue to focus on improving supply for our customers. We have invested record levels of CapEx the last two years to expand our capacity and increase our supply, but customer demand has outpaced these improvements. We continue to prioritise the production of our highest performance processors as we also continue ramping volume on 10nm and working closely with customers to align our available supply to their demand.

    Rising customer demand isn't coming from the traditional server makers: sales haven't exactly been flying of late. IDC stats show that market's global revenues declined 11.6 per cent, year on year, in the second calendar quarter of 2020 to $20bn, and dropped 6.7 per cent in Q3 to $22bn.

    So who is snapping up all these Intel server chips? The hyperscalers. Intel cannot make enough processors fast enough for Amazon, Microsoft, Google, Facebook, and others of similar size that are constantly expanding their data center operations. With Intel effectively auctioning off its Xeons to the highest and largest bidders, smaller IT suppliers, such as HPE, have to wait in line."

    Where in the above is it shown demand is rising? Perhaps supply is falling.

    where is big demand from cloud cited?

    how do we know cloud isnt going short too?

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