Intel has the memory chips it needs to keep shipping Lunar Lake: 'we were relatively aggressive in terms of getting the memory early'

Intel says it has enough memory stockpiled to continue to sell Lunar Lake to plan. According to CFO, David Zinsner, the company has dodged the worst of the ongoing memory crisis by being "relatively aggressive" in securing memory for the mobile chip.

"I think we've got what we need based on the current forecast," Zinsner says. "Of course, that could always tick up, and then we would need more memory which would kind of impact gross margins. But we were relatively aggressive in terms of getting the memory early" (transcript via SeekingAlpha).

Lunar Lake is particularly at-risk from the ongoing memory crisis, which has seen memory in tight supply and prices skyrocket, due to its use of on-package memory. Take a look at the package and you can see two LPDDR5X chips nestled besides the processor. This has benefits for efficiency and size, but has caused some headaches for Intel.

One issue from the get-go was price. Extra chips, more packaging steps, and securing memory all add to the cost of production for Lunar Lake versus other chips. As such, Lunar Lake has not offered the sort of margins that Intel would like, and buying more memory at today's prices would make matters worse.

"Those margins are low because the memory is packaged," Zinsner continues. "So that is an impact to our gross margins as well. But I think we're largely in the place we thought we would be a quarter or two ago."

Intel's ex-CEO, Pat Gelsinger, had already put an end to on-package memory before he left the business.

"It really is a one-off with Lunar Lake," Gelsinger said at the time. "That will not be the case with Panther Lake, Nova Lake and its successors as well. We'll build it in a more traditional way with memory off-package and the CPU, GPU, NPU and I/O capabilities in the package. But volume memory will be off-package in the road map going forward."

Intel dodged a bullet there. Some may have forecasted for fluctuations in memory price, but I doubt anyone understood quite how bad things would get today. Memory shortages are expected to last throughout the year and have left many manufacturers in a desperate scramble to secure more, even at heavily inflated prices.

The Core Ultra Series 2 is soon to be replaced by the Core Ultra Series 3, Panther Lake, which does not feature on-package memory. Intel can rest easy knowing it no longer has to source the memory itself, though it will still be affected by the ongoing crisis.

Someone has to pay for the memory, be it Intel or its partners, and those increases often make their way into the final price tag paid by consumers, like us. So, if we're not buying as many laptops or systems because they're too expensive, manufacturers aren't buying as many chips from Intel, and Intel's still out of pocket. As such, research firm IDC is expecting an "extremely volatile" year ahead for PC sales.

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