IT Home, November 1 news, according to Tom's Hardware yesterday, despite the consumer PC market shrinking, Intel remains confident that demand from the AI industry will offset the decline in the client market.
To this end, Intel is reallocating part of its capacity from client CPUs to data center CPUs, expanding its Fab 24 in Ireland to produce more Xeon chips, accelerating equipment installation at Fab 62 in Arizona, USA, committing to produce 18A chips, and expanding advanced packaging capabilities in New Mexico and Malaysia.
Intel CEO Patrick Gelsinger stated on the company’s earnings call: “The industry is still experiencing one of the most severe supply shortages in history, primarily driven by unprecedented demand for superintelligence. Against this backdrop, I am satisfied with our progress in server supply growth during the third quarter. I recognize that we will continue to face sustained challenges in meeting server demand over the coming quarters.”
The company’s Data Center and AI (DCAI) business generated $7.3 billion in revenue in the third quarter of 2026 (approximately RMB 48.688 billion at current exchange rates), representing a 17% sequential increase and nearly an 80% year-over-year growth. Intel expects strong demand for data center CPUs through 2027–2028 as AI infrastructure operators deploy more CPU-intensive agents and inference workloads.
To meet future demand for Xeon CPUs over the coming years, one of Intel’s top priorities is increasing production of the Xeon 6 “Granite Rapids” processors, which are manufactured using Intel 3 process technology. The company has recently begun expanding capacity at its Fab 24 manufacturing complex near Leixlip, Ireland, but this additional capacity will not come online until the end of 2027.
To further increase Intel 3 production capacity, Intel plans to reallocate some manufacturing resources at its Oregon facility from Intel 18A to Intel 3. These production lines were initially used to manufacture Panther Lake desktop processors, but due to weakened PC demand, Intel will prioritize producing higher-demand data center products. The company expects the additional Intel 3 capacity in Oregon to begin production in the second half of 2027.
Intel is also accelerating the expansion of its advanced manufacturing operations in Arizona. The company is speeding up production at Fab 52 for Intel 18A and accelerating equipment installation at the adjacent Fab 62, which will become Intel’s second large-scale manufacturing facility for the Intel 18A, 18A-P, and related process technologies.