Intel says chip supply for personal computers remains tight

FILE PHOTO: Computer chip maker Intel's logo is shown on a gaming computer display during the opening day of E3, the annual video games expo revealing the latest in gaming software and hardware in Los Angeles, California, U.S., June 11, 2019. REUTERS/Mike Blake

(Reuters) - Intel Corp INTC.O said on Wednesday it was increasing its reliance on contract chip manufacturers to ramp up supply of chips used in personal computers as the company struggles with shipment delays amid higher demand.

Intel said supply remained “extremely tight” even though it has expanded its manufacturing capacity and increased second-half PC chip supply by double digits compared with the first half.

“Despite our best efforts, we have not yet resolved this challenge,” the chipmaker said in a letter, in which it also apologized to its customers and partners for the delays.

Intel had said in October that demand in the PC business was outstripping its ability to add capacity and it was considering outside chip makers.

Shares of the chipmaker, which reaffirmed its forecast for the fourth quarter, were down 1% in after-market trading.

Reporting by Ambhini Aishwarya in Bengaluru; Editing by Arun Koyyur