Intel has disclosed production challenges that are restricting the availability of PC processors for manufacturers, just as the company appeared poised for a turnaround.
The firm is directing its limited manufacturing capacity toward more profitable data center processors, which is restricting supplies of forthcoming models such as the Core Ultra Series 3, known as Panther Lake. Intel also announced that its successor processor, Nova Lake, is slated for release by late 2026.
David Zinsner, Intel's chief financial officer, described the situation during an analysts' call following the company's fourth-quarter 2025 earnings report, noting that operations are being managed on a tight, immediate basis between factory output and customer deliveries. A transcript of the discussion was provided by Investing.com.
Zinsner explained that while efforts are focused on fulfilling strong demand in the data center segment, the client sector cannot be entirely neglected. He emphasized ongoing support for both areas while addressing the supply constraints, predicting the first quarter as the lowest point with improvements expected in the second quarter.
Intel CEO Lip-Bu Tan outlined the dual challenges: although Panther Lake chips are now being produced using the 18A process, the yield rates—representing usable wafers for completed chips—align with internal targets but fall short of market needs. Executives reported that internal stockpiles were largely depleted in the fourth quarter, leaving reserves at roughly 40 percent of maximum capacity, with plans to ramp up supplies throughout the year.
This processor scarcity coincides with broader PC sector deficits in memory and flash storage components, which are driving down sales volumes and elevating costs. Early performance evaluations of Panther Lake have been impressive, yet limited access means potential benefits remain unrealized for all involved. Tan suggested that Intel's distribution approach prioritizes major clients over smaller ones for efficiency.
Tan noted that larger original equipment manufacturers and hyperscale operators enjoy better access to memory supplies, while smaller entities struggle to secure them. He stressed the importance of coordinating processor and memory allocations through sales strategies to ensure customers can fully assemble products, avoiding situations where chips arrive without complementary parts.
Company leaders highlighted robust interactions with clients regarding the foundry operations, particularly the Intel 14A production method.
Additionally, Tan announced the unification of data center and AI initiatives under one executive, along with a streamlined enterprise product plan featuring the 16-channel Diamond Rapids component. Intel continues collaboration with Nvidia on a tailored Xeon processor incorporating NVLink integration, building on Nvidia's $5 billion investment from the previous year, though no updates were shared on potential RTX GPU modules for Intel's PC chips.
For the quarter, Intel posted a $600 million net loss on $13.7 billion in sales, a 4 percent decline year-over-year. The Client and Computing Group saw revenues fall 7 percent to $8.2 billion. Looking ahead, Intel forecasts sequential revenue between $11.7 billion and $12.7 billion.