Article · AI translation
IT Home reported on November 1, citing a report by Tom's Hardware the previous day, that although the consumer PC market is shrinking, Intel is confident demand from the AI industry will offset the decline in the client market.
To that end, Intel is reallocating some capacity from client CPUs to data center CPUs, expanding Fab 24 in Ireland to produce more Xeon chips, starting equipment installation early at Fab 62 in Arizona, United States, and committing to produce 18A chips, while expanding advanced packaging capacity in New Mexico and Malaysia.
Intel CEO Lip-Bu Tan said on the company's earnings call: “The industry is still experiencing one of the most severe supply shortages in history, driven primarily by unprecedented demand for superintelligence. Against this backdrop, I am pleased with the progress we made in increasing server supply in the third quarter. I recognize that we will continue to face 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 (IT Home note: approximately 48.688 billion yuan at the current exchange rate), up 17% quarter over quarter and nearly 80% year over year. Intel expects demand for data center CPUs to remain strong in 2027–2028 as AI infrastructure operators deploy more CPU-intensive agentic and inference workloads.
To meet demand for Xeon CPUs in the coming years, one of Intel's top priorities is increasing output of Xeon 6 “Granite Rapids” processors, which are manufactured using Intel 3 process technology. The company recently began expanding capacity at its Fab 24 manufacturing complex near Leixlip, Ireland, but that capacity will not come online until the end of 2027.
To further increase Intel 3 capacity, Intel plans to convert some manufacturing resources at its Oregon plant from Intel 18A to Intel 3. These production lines were originally intended to manufacture Panther Lake desktop processors, but because PC demand has weakened, Intel will prioritize data center products, for which demand is higher. 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 leading-edge manufacturing operations in Arizona. The company is ramping up Intel 18A production at Fab 52 and accelerating equipment installation at the adjacent Fab 62, which will become Intel's second high-volume manufacturing plant for 18A, 18A-P and derivative process technologies.