Intel Shifts CPU Capacity to Data Center, Expands Fabs in Ireland and Arizona

Intel said on October 31, 2026 that it is reallocating some manufacturing capacity from client CPUs to data center CPUs and expanding production in Ireland, Arizona, New Mexico and Malaysia to meet AI-driven server demand, according to Tom's Hardware.

The company is expanding Fab 24 near Leixlip, Ireland, to produce more Xeon CPUs, with that capacity coming online by the end of 2027 unless the schedule is accelerated. In Oregon, Intel plans to convert some manufacturing resources from Intel 18A to Intel 3, with the additional Intel 3 capacity expected to enter production in the second half of 2027.

Intel said it has begun installing equipment into Fab 62 in Arizona ahead of schedule. The site is set to become its second high-volume manufacturing facility for 18A, 18A-P and derivative process technologies. The company is also expanding advanced packaging capacity in New Mexico and Malaysia.

Cost improvements on Intel 3

Intel 3 manufacturing costs have declined by approximately 15% since the first quarter of 2026, the company said. Its Data Center and AI business generated $7.3 billion in revenue in the third quarter of 2026, up 17% sequentially and nearly 80% year-over-year.

Granite Rapids has already become Intel's fastest ramping server processor family, according to the company's management. The Oregon resources being converted to Intel 3 were originally intended to manufacture Panther Lake client processors.