Intel puts consumer chip production on back burner as datacenters make a run on Xeons

If you notice PC prices creeping up over the next few months, the rising cost of memory won’t be the only reason, because on Thursday Intel said it is reallocating foundry capacity from client chips to meet surging demand for Xeon processors used in AI servers.

Speaking with analysts on Intel's Q4 earnings call Thursday, CFO David Zinsner admitted the company was caught with its pants down after it misjudged demand for its datacenter products, leading to a capacity crunch during the quarter.

Zinsner said six months ago “every hyperscale customer” was sending signals they planned to order a smaller number of high-core count chips.

They soon changed their tune and demand for Intel's Xeon products increased considerably over the third and fourth quarters. Intel's Xeon 6 platform is used extensively as the host CPUs in GPU systems like Nvidia’s DGX B200 and B300, and ...