[News] Intel CEO Flags AI Supply Squeeze: Memory Prices Up 5–7x, Its CPUs Meet Just 50% of Demand

As the AI boom strains supplies across the tech industry, Intel is sounding the alarm over mounting component bottlenecks. Speaking at Splunk’s .conf26 Global Broadcast, CEO Lip-Bu Tan said memory constraints could further intensify, with prices soaring five- to sevenfold already, according to SeDaily. CPU availability is also under pressure, with Intel currently able to meet only about 50% of customer demand, Tan said.

AI Bottlenecks Mount: Memory, CPUs and More

As SeDaily noted, Tan said the memory crunch he warned about early last year has now materialized, which has prompted projects to delay—and is poised to deepen.

Beyond memory, he pointed to power availability and cooling as the next major constraints facing the semiconductor industry as AI infrastructure continues to scale. SeDaily, citing Tan, reports that beyond air cooling, Intel is investing in technologies including liquid and microfluidic cooling.

CPUs could be another pressure point. Tan said demand for Intel’s core processors is surging and expects shortages to persist as AI shifts toward inference, with AI agents potentially scaling into the trillions. While GPUs power training, CPUs remain critical for orchestrating GPUs, applications and broader computing resources, Tan said.

Against this backdrop, Intel is reportedly preparing to raise PC processor prices by around 10% on October 5, potentially marking its third price hike since late 2025, according to NoteBookCheck. The report suggests the chipmaker lifted PC CPU prices by roughly 10% in 1Q26, followed by another round in July covering select consumer and server chips, with increases ranging from tens of dollars to more than $1,000.

EMIB in Focus; 14A Enters Production in 1Q27

Notably, Tan also pointed to advanced packaging as Intel’s next major growth area—and substrates as a key supply bottleneck. He described advanced packaging as the industry’s future “Holy Grail,” but warned that substrate capacity remains tight.

Only four major suppliers dominate the market—two in Japan and two in Taiwan, Tan said, adding that Intel “has to prepay to get their attention.”

That scramble for capacity is already driving investment. According to ZDNet, Japan’s Ibiden, a leading FC-BGA substrate maker and longtime Intel partner, plans to convert idle fab space into a dedicated mass-production line for Intel’s EMIB-T substrates. The project is valued at roughly KRW 2 trillion and is reportedly backed by advance payments from major customers including Google, Amazon and Intel.

EMIB substrate yields appear to be improving faster than feared. Analyst Jeff Pu estimates that Japanese suppliers have already lifted yields to around 45%, up sharply from 20–25% in 2Q, with the figure expected to exceed 50% by end-September and reach about 55% in January.

Meanwhile, Tan offered fresh details on Intel’s foundry roadmap. With 18A already in mass production and yields improving by about 7% annually, he said the next-generation 14A process is now slated to enter production in 1Q27.

Read more

• [News] Intel CFO Says 14A Defect Reduction Fastest Since 22nm; Customer Talks Reportedly Grow Ahead of 2028 Ramp
• [News] Intel’s Advanced Packaging, Led by EMIB-T, Set to Hit Its Stride in 2029; DRAM Manufacturing Ruled Out

(Photo credit: Intel)