Intel data center revenue increased 78% while PC revenue fell 5%
Intel says memory shortages push PC costs up. It expects the PC slowdown to continue through the first half of next year.
Intel reported third quarter 2026 revenue of $16.5 billion, 21% more than one year before. Its data center and AI group made $7.3 billion, 78% more. Its PC group made $8.1 billion, 5% less, and Intel blames memory shortages for this. Lip-Bu Tan, chief executive of Intel, says that supply, not demand, limits the data center business.
Two different markets
Demand is strong at large cloud firms, enterprises and new AI cloud firms. David Zinsner, chief financial officer of Intel, called the growth the most in 15 years. Intel blames memory shortages for the PC fall. More memory prices push system costs up.
The numbers
- Data center operating income: $3.0 billion, a 41.5% margin.
- Intel Foundry revenue: $6.7 billion, 58% more, with sales between Intel units.
- Intel Foundry loss: $1.9 billion, less than $2.3 billion one year before.
What is not known
Tan says that substrate (the bottom layer of a chip) supply limits output. Intel gave no date for the end of this limit. The source says that AMD has a 192-core chip with no Intel chip of the same type.
Insight: Chip sales increase on buyers whose own revenue is in question
Intel says demand is strong at new AI cloud firms. Gartner said that owners of AI data centers must get $8.5 trillion of revenue through 2030. It sees no more than $3.6 trillion. It also said that more than 80% of new AI cloud firms will stop operation. This reads as chip sellers that get cash from buyers who cannot all last. Look at demand when these firms stop.
Sources
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