Intel plans to shift some manufacturing capacity in Oregon from Intel 18A to Intel 3 for Xeon 6 Granite Rapids server processors. On the October 29 earnings call, CFO David Zinsner explained that the capacity had originally been intended for Panther Lake. Weaker PC demand provides room to redirect it to server chips. Intel expects the additional Intel 3 capacity in the second half of 2027.
The shift comes as Intel’s server business grows. Data Center and AI revenue reached $7.3 billion in the third quarter, up 78% from a year earlier. Client Computing and Physical AI generated $8.1 billion, down 5%. Intel’s total quarterly revenue rose 21% to $16.5 billion.
Intel attributes softer PC demand to memory availability and pricing, alongside limited IT budgets. Zinsner expects the slowdown to continue at least through the first half of 2027. For the fourth quarter, Intel forecasts CCPG revenue falling more than 20% from the third quarter as customers reduce inventories and align purchases with anticipated demand.
