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HPE Expects Intel Xeon Cascade Lake Shortage To Run Through 2020: Report

‘Based on demand, we are expecting supply will remain constrained through 2020,’ according to an HPE statement in The Register. ‘Server platforms which use these processors are affected.’

Hewlett Packard Enterprise is expecting a shortage of Intel’s second-generation Xeon Scalable Cascade Lake processors to run through the rest of the year, according to a report in The Register.

“Based on demand, we are expecting supply will remain constrained through 2020,” according to an HPE statement in The Register. “Server platforms which use these processors are affected. In order to minimize customer impact as a result of these supply constraints with Cascade Lake processors, HPE urges customers to consider alternative processors, which are still available.”

In a statement to CRN, HPE said it is “experiencing a constraint on certain processors. There are other processors that are still available and we’re urging our customers to consider alternatives. We are in constant dialogue with all of our suppliers and will continue to work through possible options to minimize customer impact and meet their needs.”

[RELATED: Intel Cuts Prices Of 2nd-Gen Xeon Scalable CPUs With High Memory Capacity]

Intel declined to comment on HPE’s advisory, but a spokesperson said the company will discuss CPU supply matters in the company’s fourth-quarter earnings on Thursday.

In Intel’s third-quarter earnings last October, CEO Bob Swan said that while the company has continued to invest in expanding its manufacturing capacity, the chipmaker was still experiencing supply constraints, which mostly impacted processors for PCs.

At the time, Swan said the shortage was expected to last through the end of 2019 despite Intel’s 25 percent increase in capacity in 2019, which had resulted in a double-digit bump in client processor supply for the second half of that year.

Swan said CPU supply was expected to further improve in the mid- to high-single digits in 2020 with the company increasing capacity by another 25 percent this year.

"Our intention next year [in 2020] is to not be a constraint on our customers' growth," Swan said during the third-quarter earnings call last October.

CRN has reached out to Dell Technologies and Lenovo for comment on the Cascade Lake shortage.

HPE has partnered closely with Intel rival AMD on the chipmaker’s second-generation EPYC Rome processors. In fact, HPE said last August that its HPE ProLiant DL325 and HPE ProLiant DL385 servers broke 37 world records in what it called “undisputed performance and efficiency leadership.”

Tom Lattin, vice president and general manager of workload optimized solutions and mass market for HPE, told CRN last August that AMD's second-generation EPYC Rome processors offer a "breakthrough" in total cost of ownership for the data center.

HPE partners, for their part, said moving to an AMD ProLiant based servers is not a quick fix given partner and customer commitment to the Intel Xeon platform. “We see Intel as the better and more reliable product,” said the top executive for an HPE partner who did not want to be identified.

That said, the executive said the Intel shortage is causing tremendous pain for partners who are working closely with HPE and customers to resolve supply issues.

“We communicate to the customer with open lines of communication, totally honest, no guarantees or promises,” said an executive who did not want to be identified. “We set the proper expectations. The problem is we have 24/7 customers like health care providers. That’s when it becomes a super critical issue. HPE and our disty are going to bat for us to improve supply chain and estimated ship dates. It is painful, but you do the best you can. It is all about setting proper expectations.”

Another channel sales executive, who did not want to be identified, said AMD is only an option if it has been “qualified” as an alternative by the customer. “Some large enterprise are Intel only,” he said.

The bigger issue, the channel partner said, is that the time may have come for “customers to consider” AMD. “Having Cascade Lake as an alternative when Skylake was constrained gave us a hedge,” said the executive. “Now both are constrained. AMD now represents a significant option.”

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