Intel Corp.'s apology Wednesday to customers about the ongoing supply constraints did not seem to surprise investors, but the news may prove to be a potential benefit to competing Advanced Micro Devices Inc.
Earlier Wednesday, the chip giant gave customers an update in a regulatory submission on today's production challenges.
"I also want to update you on our actions and investments to improve supply-demand balance and support you with Intel-led performance products," wrote Michelle Johnston Holthaus, an Intel
Executive Vice President and General Manager of Sales and Marketing. "Despite our best efforts, we have not yet solved this challenge."
Investors were not shocked by the news, since Intel confirmed its previous guidance for the fourth quarter, which included a forecast of a further $ 1[ads1].2 billion in revenue for the full year.
"I believe Intel will fulfill its financial obligations if, for no other reason, it will not need to provide price discounts that are not already committed to a contract," Pat Moorhead, principal analyst at Moor Insights & Strategy, said in an email .
It was not clear whether Intel was experiencing additional production issues, or whether the letter reiterated the ongoing issues discussed by CEO Bob Swan at the company's revenue conference last month.
"We release our customers and they expect more from us," Swan said last month in the interview. "PC demand has exceeded our expectations and exceeded third-party forecasts. We now believe the market is stronger than we predicted in the second quarter, which has made storage buffers difficult. We are working hard to regain balance between supply and demand, but we expect to continue to be challenged in the fourth quarter. ”
While it takes PC manufacturers time to shift production to accommodate another brand of microprocessor, it is possible that AMD
can finally take advantage of Intel's supply problems. "This is an opportunity for AMD to get a share, but it will take some time before OEMs [original equipment manufacturers] switch volume to AMD," said Kevin Krewell, principal analyst at Tirias Research. He added, although it was not clear which Intel products were most affected by the problems.
With AMD's stock on a tear this month, investors can see Intel's news as another reason to jump on board.