Intel boosts spending by $1 billion

Intel Corp., which dominates the market for personal computer processors, said it's taking steps to increase output and alleviate a shortage that had threatened to slow the industry's growth.

The Santa Clara, Calif.-based chipmaker is adding an extra $1 billion to its capital equipment budget this year, increasing output from facilities in the United States, Ireland and Israel.

The company said it's been surprised by a return to growth in demand for personal computers.

Total spending in 2018 will be $15 billion, Intel said in a letter to customers posted on its website Friday.

Intel has struggled to shift to a more-advanced manufacturing technique, called 10-nanometer, and that has given rivals such as AMD a chance to catch up in this crucial part of the chip industry. But Friday's update suggests that demand for Intel's older chips remains strong.

Intel said it's making progress in moving its output to 10-nanometer technology, an effort that's as much as two years late, according to some analysts' estimates.

Shrinking the dimensions of the tiny transistors that give chips their function allows chipmakers to produce them more cheaply, make them more powerful or give them the ability to use less electricity.

Intel said it's devoting production resources to high-end chips such as server parts. That may cause a shortage of budget PC chips.