Capacity moves from consumer to server
Intel is shifting part of its manufacturing capacity from consumer PC chips to data center processors as demand from AI infrastructure puts pressure on supply. The company is betting that server demand will offset a shrinking PC market.
What Intel is doing
- Fab 24 near Leixlip, Ireland, is being expanded to make more Xeons; that capacity is expected online by the end of 2027.
- Equipment installation at Fab 62 in Arizona has started ahead of schedule; the site will become Intel's second high-volume facility for 18A and 18A-P process technologies.
- Some 18A resources in Oregon will be converted to Intel 3. Those resources were originally intended for Panther Lake client processors, but weaker PC demand let Intel prioritize data center products.
- Advanced packaging capacity is being expanded in New Mexico and Malaysia.
Xeon 6 priority
Intel's near-term goal is to increase output of Xeon 6 "Granite Rapids" processors, built on its Intel 3 process. According to the company, Granite Rapids has become its fastest-ramping server processor family, but demand still exceeds supply. Intel is also improving yields and cutting production cycle times to get more usable chips from existing capacity.
The numbers
Intel's Data Center and AI (DCAI) business generated $7.3 billion in revenue in the third quarter of 2026, up 17% sequentially and nearly 80% year-over-year. The company expects data center CPU demand to stay strong through 2027-2028.
