Intel expects the slowdown in the personal computer market to continue through at least the first half of 2027, as rising memory costs and supply constraints weigh on PC demand while spending on AI infrastructure drives growth in its data center business.
In its third-quarter 2026 results released on October 29, Intel reported revenue of $16.5 billion, up 21% from a year earlier. Its Data Center and AI division generated $7.3 billion, a 78% increase, while the Client Computing and Physical AI Group recorded $8.1 billion, down 5% year over year.
Chief Financial Officer David Zinsner said the PC market slowdown would continue at least through the first half of next year. Chief Executive Lip-Bu Tan said Intel’s immediate priority was increasing supply to meet strong demand for its Xeon processors, which are used in data center systems.
Higher memory prices are adding pressure to PC makers. Suppliers have been shifting production capacity toward high-bandwidth memory used in AI systems, leaving less supply for conventional computer components and pushing up device costs, Reuters reported on October 30. Zinsner also said Intel was not optimistic about memory supply in 2027 and did not expect conditions to improve that year, The Verge reported after the earnings call. The wider AI-driven memory crunch has also contributed to higher prices for consumer electronics.
Intel forecast fourth-quarter revenue of $15 billion to $16 billion, below the $17.07 billion average analyst estimate cited by Reuters. The company also expects client-computing revenue to fall by more than 20% sequentially in the current quarter, following a 5% year-over-year decline in the September quarter.
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