Intel's Q3 2026 results: PC chip revenue fell 5% to $8.1 billion while data center revenue rose 78% to $7.3 billion. Intel expects PC chip revenue to drop more than 20% this quarter, blames memory prices, and is converting laptop-chip wafer capacity in Oregon to server production.
Intel just told investors that the PC market is getting worse before it gets better. In its third-quarter 2026 results, released October 29, the company said sales of its PC chips fell while sales of its server chips nearly doubled. On the earnings call, it said PC chip revenue will drop more than 20% this quarter, and that it is converting some laptop-chip capacity to make server chips. Tom’s Hardware followed up on October 31 with a report on the shift.
What changed
Confirmed by Intel’s release and its executives on the call:
- PC chips shrank, servers surged. The client group, now called Client Computing and Physical AI, brought in $8.1 billion, down 5% from a year earlier. Data Center and AI brought in $7.3 billion, up 78%. Total revenue was $16.5 billion, up 21%.
- This quarter looks worse for PCs. CFO David Zinsner said Intel expects client revenue to “decline greater than 20% sequentially” in the fourth quarter. Intel guided total Q4 revenue to $15.0 billion to $16.0 billion.
- Memory is the reason Intel gives. CEO Lip-Bu Tan said “customers began signaling a PC slowdown based on the memory prices and availability,” and that PC prices have “increased significantly” this year.
- It will last into 2027. Zinsner said Intel sees “the PC slowdown continuing at least through the first half of next year.”
- Laptop-chip capacity is moving to servers. Tan said the “immediate priority is to unlock additional supply” for Xeon server chips. Zinsner said the capacity Intel is taking offline in Oregon to install its Intel 3 process is 18A wafers. Xeon 6 server chips are built on Intel 3. 18A is the process behind Panther Lake, Intel’s current Core Ultra laptop chips. Tan said Intel 3 production there should start in the second half of 2027.
- Two more supply limits. Tan cited an industry-wide shortage of the advanced substrates Intel uses to package its chips, and said an accident caused an extended shutdown at its Fab 28 factory in Israel.
Intel did not announce any change to its laptop chip prices.
What it means
Don’t plan a laptop purchase around the hope that PCs get cheaper soon. Intel is selling fewer PC chips because the finished machines cost more, and the main driver is memory, which SK Hynix expects to stay short through 2030. PC makers already shipped 21% fewer units last quarter as memory costs pushed prices up. Intel moving wafers from Panther Lake to Xeon adds one more reason holiday Windows laptop deals may be thinner than usual.
If your current laptop does the job, keeping it through mid-2027 is a reasonable call. If you need a machine now, buy on need and lock in today’s price instead of waiting for a dip. Pay close attention to the memory you configure, since that is where prices are moving most. Macs aren’t immune to the same pressure: Apple raised the MacBook Neo education price to $649, citing memory costs, though the new M6 14-inch MacBook Pro held at $1,999.