Intel CFO David Zinsner Warns Chip Supply to “Be Depleted” by Q1 2026 Due to Surging Demand for PC and Server CPUs

In the recent earnings call, Intel highlighted a significant surge in demand across both server and client CPU markets, a trend anticipated to persist well into the following year. This revelation underscores the company’s strong position in the competitive landscape of computing technology.

Projected Growth in Intel’s DC Segment Fueled by Xeon CPU Adoption

During Intel’s Q3 earnings discussion, industry optimism surged thanks to insights from CEO Lip-Bu Tan and CFO David Zinsner regarding a critical component of the AI supply chain: overall production volume. In a recent interview with Barron’s, Zinsner divulged that a ‘chip supply’ shortage looms as demand for both data center (DC) and client CPUs continues to increase steadily. This upward trajectory is expected to lead to depleted chip inventories by Q1 2026, marking a pivotal challenge that also signifies substantial growth opportunities for Intel’s foundry operations.

Intel faces chip shortages going into 2026 as stronger-than-expected demand outpaces its ability to manufacture chips. In a phone interview with Barron’s, Intel CFO David Zinsner tells me the first quarter of 2026 will be the “most challenging”for meeting chip demand, as Intel’s…

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The increasing demand is attributed to several factors, particularly within the DC segment. Intel’s Xeon platform is witnessing heightened adoption, especially the Xeon 6 ‘Granite Ridge’ CPU series, which positions the company to capitalize on the AI sector’s growth. To meet this demand, Intel is progressively enhancing its production capabilities, even for older technologies like the Intel 7 node. Nevertheless, despite these efforts, Intel expects its products to remain limited in availability as 2026 approaches.

The team executed well to support upside in the quarter given the current tight capacity environment, which we expect to persist into 2026. We are working closely with customers to maximize our available output, including adjusting pricing and mix to shift demand towards products where we have supply and they have demand.

On another front, Intel’s Raptor Lake CPU lineup is also facing production challenges. While this limitation is not solely due to heightened demand, it reflects the company’s strategic emphasis on ramping up server CPU production at nodes like Intel 7. Consequently, Intel is raising Raptor Lake prices to balance the needs of both client and DC markets. However, the server CPU segment takes precedence for Intel, leading to a temporary deprioritization of consumer market products.

Intel Xeon 6 CPU — Intel Xeon | Image Credits: Intel

It is noteworthy that Team Blue is regaining traction in the DC market, particularly as the company’s market share had been dwindling to competitors such as AMD. With Intel’s x86 products once again attracting attention, the resulting strain on production has molded a supply environment that is likely to remain constrained into the upcoming year.

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