Intel Corp., which dominates the market for personal computer processors, said it’s taking steps to increase output and alleviate a shortage that threatens to slow the industry.
The Santa Clara, California-based chipmaker is adding an extra $1 billion to its capital equipment budget this year, increasing output from facilities in the U.S., Ireland and Israel. The company said it’s been caught out by a return to growth in demand for personal computers. Total spending in 2018 will be $15 billion, Intel said in a letter to customers posted on its website Friday.
The shares jumped 2.8 percent on the news, to $47.18.
The output from Intel’s previously industry-leading plants has come into focus this year as it struggled to make the shift to a more advanced manufacturing technique. That’s created the chance for rivals to catch up in this crucial part of the chip industry.
“We’re making progress with 10 nanometer,” Intel said. “Yields are improving and we continue to expect volume production in 2019.”
Intel said it’s devoting production resources to high-end chips such as server parts. That may cause a shortage of budget PC chips. The squeeze won’t impact Intel’s ability to hit annual revenue targets, according to the statement.
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