Dell downgrades forecast due to poor Intel CPU availability

Dell has lowered its expectations for the financial year due to the poor availability of Intel CPUs. The computer manufacturer therefore expects to supply fewer PCs and laptops in the last quarter of this year.

“Intel’s CPU shortages have worsened in the quarter, impacting business and consumer PC shipments in the fourth quarter,” Dell chief executive Jeffrey Clarke said in a conference call with investors. A transcript of this can be found at SeekingAlpha. Dell expects to achieve annual sales of between $91.5 and $92.2 billion. Previously it was expected that this would be between 92.7 and 94.2 billion. Dell’s financial year ends on February 1, 2020.

Dell announced the new expectations at the presentation of its quarterly results. In the past three months, Dell had revenue of $22.84 billion, up 2 percent from a year earlier. Product sales were $17.49 billion, down 1 percent from the same quarter last year. Service revenues rose 10 percent to $5.36 billion. Net profit was $552 million. Last year that was a loss of $895 million.

Intel apologized for new shortages in an open letter last week. These shortages were caused by ‘variations in production’ that could not be absorbed. Intel’s 14nm process has been under high pressure for years. The manufacturer makes by far the vast majority of its CPUs and chips in this process. The switch to 10nm was made this year, but it is not widely used. Intel will continue to use 14nm for most processors and is now working on its 7nm process, which should be deployed from the end of 2021.

Dell XPS 13 2-in-1, one of the first laptops with Intel Ice Lake processor made at 10nm