Intel has announced a strategic shift to prioritize its data center segment over client-side production due to supply shortages. The decision follows Intel’s report of better-than-anticipated Q3 results, which showed a net income of $4.1 billion on revenues of $13.7 billion, exceeding analyst expectations.
Despite this financial success, Intel has been struggling with supply issues that have limited its ability to meet rising demand. The Client Computing Group, Intel’s largest unit, generated $8.5 billion in revenue, while the Data Center and AI revenue dropped slightly to $4.1 billion.
Intel’s CFO David Zinsner noted that the demand for processors is high, but supply constraints on manufacturing processes, such as Intel 10 and Intel 7, have hindered their ability to fulfill this demand. Going forward, the company plans to adjust its pricing and product mix to prioritize server shipments, thereby improving its output in response to customer needs.
In light of these challenges, Zinsner anticipates that revenue for Q4 will be flat compared to Q3, with some fluctuations expected in revenue from different segments. Intel’s commitment to enhancing its data center technology and infrastructure positions it to capitalize on emerging opportunities in the market.
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