Core Viewpoint - Intel warns that CPU shortages may persist into next year due to current demand exceeding supply, despite reporting improved execution for the fourth consecutive quarter [2][3]. Financial Performance - Intel reported a 3% year-over-year revenue increase for Q3, reaching $13.7 billion, driven by a 5% increase in the Client Computing Group's revenue to $8.5 billion, while the Data Center and AI Group's revenue declined by 1% to $4.1 billion [2]. - The company's gross margin was 38.2%, up 23.2 percentage points from the previous year, and earnings per share were $0.90, compared to a loss of $3.88 per share in the same quarter last year [2]. - Intel achieved a net income of $4.3 billion, marking its first quarterly profit since 2023, after a net loss of $17 billion in the same quarter last year due to restructuring and impairment costs [3]. Supply Chain and Production - CFO David Zinsner highlighted meaningful measures taken to strengthen the balance sheet, including accelerated financing from the U.S. government and investments from Nvidia and SoftBank, enhancing operational flexibility [3]. - Intel's manufacturing performance improved, with revenue from manufacturing reaching $4.2 billion, attributed to increased efficiency in chip foundries [3]. - Zinsner indicated that supply constraints are primarily due to capacity limitations in older Intel 10 and Intel 7 manufacturing nodes, which are critical for producing older generation processors [3][4]. Product Demand and Market Dynamics - Demand for older products, such as the Intel Core processors and Xeon processors, remains strong, driven by the transition to Windows 11, which has led many enterprises to upgrade their systems [6]. - Despite the high demand for older nodes, Intel is also seeing double-digit growth in AI PC products, with an expected shipment of around 100 million AI PC processors by the end of the year [5][6]. - Zinsner noted that the supply issues might peak in Q1 of next year, after which Intel expects to catch up in the following months [6]. Industry Insights - The comments from Intel's CFO align with observations from distributors regarding the CPU shortage, indicating a combination of improving demand and product transitions in the market [7].