Exclusive: Demand To Exceed Supply For Intel Rocket Lake Due To Substrate Shortage
It would appear that gamers can't catch a break. Products that rely on TSMC, such as AMD parts, have had tight supply for a while now (with a few exceptions). Intel CPUs, considering they are built in their own foundry, have had a free run of the proverbial house for a while now and CPU prices have been consistently affordable. According to our sources, this is something that could change later this year due to substrate shortages affecting the entire semiconductor industry - including Intel.
Intel reporting tight Rocket Lake CPU allocations for Q2 due to substrate shortage to partners, Q1 allocation is decent
Before we go any further, here is the top-level summary:
- Intel has been reporting substrate shortages to key partners throughout last week.
- Intel Q1 allocations for Rocket Lake are quite good so the SKUs will be available close to MSRP for at least a few weeks if not more.
- Unfortunately, due to substrate shortages, Q2 allocations for Rocket Lake are going to be hit hard.
- Allocations will be favored towards the top of the stack first, Core i9; so Core i7 and Core i5 will be the most impacted.
- Considering Intel is in a far better position to manage supply than TSMC-AMD (which unlike Intel foundry is not just substrate-constrained but capacity-constrained as well), we expect any premiums to be lower than AMD Ryzen.
What this basically means is that Intel partners, including distributors and retailers, are going to have a decent initial stock of Intel Rocket Lake CPUs that might last a month or more. This is the Q1 allocation and part of the initial order. Q2 allocation, however, is a different story as Intel will not be able to match the initial volume for the entire stack, and considering it is still selling every chip it can produce, it will want to focus on the higher-margin stack first - driving market prices higher.
The price of an Intel 11900k is already up to $1100 on Amazon:
The Intel Core i7 11700k still appears to be available close to MSRP at $407 (for now) however this might change in a few months.
We reached out to Intel for a right of reply (as we always do) and they had the following statement for us re the substrate shortage:
As we have said in the Financial Outlook press release on March 23rd, demand for semiconductors and Intel products is very strong. We’ve been expanding our capacity to meet this demand and, as a result, we expect to grow our annual client CPU supply double-digits year-over-year versus 2020. However, the unprecedented global demand for semiconductor components and substrates is a challenge for many industries, including ours. We are actively working with our supply chain partners to increase the availability of third-party materials and components to further improve output for our processors and also support the broader PC ecosystem. We remain focused on supporting our customers and we will continue working to increase supply to meet our customers’ needs.
-Intel spokesperson to Wccftech
Upstream 300mm wafer manufacturers like Shin-Etsu and Global Wafers are already running at a 100% capacity and there is a finite supply of substrate trickling down to downstream foundries like Intel. With the company confirming the shortage to its partners, it looks like gamers are up for a very difficult year ahead with cryptocurrencies and substrate shortages driving prices, well, to the moon. Since the shortage stems from upstream, there is very little foundries like Intel and/or TSMC can do to mitigate this situation.
Of course, one man's loss is another's gain. While price hikes due to demand-exceeding-supply are bad for gamers, they are going to be a boon for foundries and design houses like Intel in terms of revenue. We asked our source whether other Intel parts are going to be affected but were told that Intel is only talking about Rocket Lake allocations for now, so it is likely prioritizing substrate for its enterprise parts like the upcoming Ice Lake processors - which would make business sense.