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Intel Processor Shortage Resulting in Waiting Lists for PCs

Intel – one of the largest manufacturers of computer processor chips – has announced it won’t be able to meet the demand for PC chips in 2019. Yikes! That means fewer desktops and laptops in a year when many businesses are moving to Windows 10 machines in anticipation of Windows 7 being end-of-life (EOL) in January 2020.

If you need new PCs this year, don’t wait – order them now. We can help. Thanks to our relationships with various distributors, we can find the desktops and laptops your business requires.

Why the Big Fuss About a Little Chip?

When we say “chip” or “processor,” we mean the CPU (central processing unit). It’s the primary device inside a computer, be it a desktop, laptop, or even a server. They’re highly specialized, highly sought after, very complex little devices.

If you were to pull the CPU out of the computer you’re using right now, it’d be no larger than 1-3 inches square. It has about 100 tiny metal pins that actually get sandwiched into the motherboard when the computer is constructed. CPUs are very easy to break though, so we don’t recommend actually taking one out and looking at it.

So why the chip shortage? Basically, Intel miscalculated the demand for server chips. Like any company, Intel has to do supply and demand forecasting to determine what types of their processors they’re going to make for the coming year.

Intel underestimated how many server chips they’d need. Server processors being more expensive are therefore more profitable for them. It would be very bad for Intel to not keep up with server chip demand from major server manufacturers like HP, Dell, Lenovo, and Microsoft.

So, Intel shifted some of their production lines from making desktop processors to making server chips to keep up with demand. Thus, they’re not producing the normal volume of desktop and laptop processors.

Typically, when we buy PCs from HP or Dell, they have hundreds of PCs sitting in their warehouses ready to ship. But now, these big tech distributors don’t have stock because not enough computer processors are available. The rest of the PC is all built and ready, but without the processor in it, it’s not being shipped to the warehousing and distribution point.

A Perfect Storm

It’s a particularly bad time for a chip shortage for two key reasons.

First, we usually see an uptick in purchasing end-user PCs at this time of year. School systems are planning major computer refreshes over the summer. Hospitality businesses need new point-of-sale devices and desktops before the vacation season starts.

Second, Windows 7 is end-of-life (EOL) as of January 2020. It will no longer be getting essential security patches after that point. We are less than a year out from the demise of Windows 7. That means your organization needs to be using Windows 10 Pro or better across the board. Most of your Windows 7 machines are probably fairly old by now, so it makes sense to get a whole new device when you move to Windows 10. However, with fewer Intel PC processors, getting new desktops to run Windows 10 on will be more challenging.

This collision of increasing demand in the marketplace with Intel’s prioritization of server chip manufacturing means a major shortage of available PCs in the channel.

We should note here that if you have a big server refresh going on this year, don’t fret. Intel’s emphasis has been on making sure that demand is met on the server level.

What’s a Business To Do?

The short answer is: order your computers now. Waiting lists are being created and we can get you in line for desktops and laptops as they become available.

But you also have another option – buying a computer with an AMD processor in it instead of an Intel processor. AMD is Intel’s main competitor in the CPU business. From a performance standpoint, AMD and Intel chips are on basically the same level. If you sat you down in front of a machine running an Intel i5 processor and another machine with an AMD6000 processor that were both running Windows 10, we would argue you wouldn’t probably know the difference between the two on a day-to-day basis. In addition, since AMD has smaller market share, their products are priced more aggressively.

However, we do not recommend our customers mix their server environment with Intel and AMD. Certain functions in VMWare and other virtualization software won’t work if you have an Intel server alongside an AMD server.

But, when it comes to desktops and laptops, your end users aren’t going to notice the difference between an Intel or AMD processor – and neither will your business. Say your normal model is an HP Elite Desk. We can help you look at an equivalent Dell machine if they have more availability. But if you prefer to stay with one manufacturer (say HP) because you’ve always bought those products or you want a single point of contact for hardware issues, we can look for AMD equivalents for you. That way it’s still an HP Elite Desk, but one from their AMD model lineup.

Be aware that there tends to be fewer PC options in a company’s AMD line. If you have certain specifications you need (unusual size, DVD player, etc.), we might have to option some of those pieces together because manufacturers don’t have as many flavors of AMD machines built yet. However, HP is developing and manufacturing more types of AMD machines for 2019 to be ready for the demand.

Seriously, Don’t Wait ‘Til the Last Minute

At ITP, we’ve heard the chip shortage may continue all the way to the end of the third quarter of 2019. We recommend planning for the worst and assuming this situation isn’t going to improve for most of the year.

As we approach the fourth quarter, we expect a panic when people will realize that Windows 7 EOL is only a couple of months away. We anticipate a spike in demand for any desktop PC, which is going to drive up costs and make supply even tighter. And ITP may not have enough resources to deploy new Windows 10 equipment if we have all of our customers asking us to do desktop upgrade projects at the same time right before the end of the year.

Feeling stressed out yet? You don’t have to be, because you’ve got an IT partner with the right connections and experience to help you solve this problem. We can help you determine the right machines to buy for your environment. Plus, we have access to multiple distributors and warehouses.

But it’s up to you to get your PC purchases and projects going early. A productive business depends on productive end users, and productive end users depend on superb computers. Now more than ever, it’s vital you have a really good desktop replacement strategy in place so you’re staying well ahead of your organization’s needs and getting those Windows 10 machines up and running.

So reach out to us. We’re standing by ready to help.

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