Intel faces supply shortage as data center demand exceeds output

Intel is experiencing a manufacturing bottleneck as demand for its data center and AI chips significantly outpaces factory output. The company’s data center and AI segment saw 59% year-over-year growth in Q2 2026, following 22% growth in Q1 2026.

Management has noted that supply for server processors built on Intel 3 is extremely tight, citing challenges with wafers, memory, and externally procured substrates. To address these shortages and meet demand, Intel has sharply increased its capital spending projections, moving from a flat year-over-year estimate to more than $20 billion for calendar 2026.

In response to these needs, the company recently priced a $20 billion stock offering at $95 per share, an increase from its initial $15 billion proposal.