Intel, which just received lifelines from Nvidia, Softbank, and the US government, isn’t fully ready to take advantage of new PC demand and is prioritizing AI.
With Windows 10 on its last legs, Intel is looking forward to the PC industry growing more than it has in years — the most since 2021, when the covid-19 pandemic revived the industry by creating a huge surge in demand.
But it seems the struggling Intel, which just received lifelines from Nvidia, Softbank, and the US government, isn’t fully ready to take advantage and is prioritizing AI instead. Today on the company’s Q3 2025 earnings call, where Intel saw its first profit in nearly two years due primarily to those lifelines, CEO Lip-Bu Tan and CFO David Zinsner explained how the company doesn’t yet have the chips. It’s currently seeing shortages that it expects to peak in the first quarter of next year — in the meantime, leaders say they’re going to prioritize AI server chips over some consumer processors as it deals with supply and demand. “We expect CCG to be down modestly and DCAI to be up strongly as we prioritize capacity for server shipments over entry level client parts,” Intel says. Tan revealed today that Intel will also release new AI GPUs each and every year, following Nvidia and AMD in shaking up their traditional cadence to address the huge demand for AI servers. It’s not clear what that might mean for those hoping for more Intel gaming GPUs. While all eyes are on Intel’s hot new Panther Lake and its 18A process to show the world it can still make the most potent consumer PC chips and make them in-house, the company reiterated it’s only launching one SKU this year and slowly rolling out others in 2026. Here’s another possible reason why: Zinsner hinted today that Panther Lake will be a “pretty expensive” product to start with, and Intel’s going to have to push its existing Lunar Lake chips instead “in at least the first half of the year.” While Intel has repeatedly pushed back against the idea that its 18A process had poor yields, the company admitted to investors and analysts today that it’s not ready to be a huge financial success either: yields “adequate to address the supply but not where we need them to be to drive the appropriate level of margins,” says Zinsner, suggesting that it might be 2026, or even 2027 for an “acceptable level of yields” there. For now, Intel will be “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” — which sounds like playing with the prices it charges PC makers to stick Intel inside their computers and pointing them at Lunar Lake parts instead of hot new ones. Tan reiterated today that he’s not going to invest in more capacity unless there’s “committed external demand,” and Zinsner says investments in capacity next year won’t “significantly change expectations”. Intel says that 18A will be a “long-lived node” that will power “at least the next three generations of client and server products.” If you were hoping for a return to the “tick-tock” days where Intel would alternate between shrinking its chips and releasing new architectures every generation, that’s not happening here. But that doesn’t mean Intel will cancel its next node, Intel 14A, as it warned it might. Tan suggested today that customers have stepped in to save 14A, and Intel, that the company is “delighted and more confident” in it, and Zinsner says it’s not only “off to a good start,” but better than 18A was at this point “in terms of performance and yields.”
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