Amid a global shortage of processors for personal computers, Intel Corp. today pledged to spend $1 billion on additional fabrication equipment in a bid to boost production.

The investment will be distributed among chip fabrication facilities in the U.S., Ireland and Israel. It puts Intel on track to close 2018 with total capital expenditures of $15 billion and comes as part of an effort by the company to reassure personal computer makers, as well as Wall Street, that it can cope with the recent growth in computer sales.

Data from Gartner Inc. shows that the second quarter saw global PC shipments increase for the first time since 2012. Intel, which supplies the vast majority of the central processing units used in laptops and desktops, had responded to previous years’ stagnating sales by prioritizing the production of higher-margin products such as its Xeon server chips. This combination of factors has left the company struggling to keep up with the recently rekindled demand.

Another contributor to the shortage is Intel’s ongoing effort to move from manufacturing 14-nanometer chips to newer, more advanced silicon based on a 10-nanometer design. The transition has suffered from repeated delays over the years, to the alarm of some Wall Street analysts. Intel’s bumpy road to 10-nanometer technology has given rival Advanced Micro Devices Inc. an opportunity to catch up and bring increasingly competitive products to market.

“While I am sure Intel would want to have 10-nanometer online now, most of the current challenges stem from upside demand for 14-nanometer parts,” said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. “Every market is up, even PCs, which is putting a strain on 14-nanometer. Moving notebooks from two to four cores contributed to the upside challenges, but it was not the primary reason.”

In an open letter, Intel interim Chief Executive Officer Bob Swan reassured investors that the company will meet its most recent full-year revenue outlook of $69.5 billion. He also took the opportunity to double down the chipmaker’s earlier pledge that volume production of 10-nanometer chips will begin next year.

Intel’s shares are up about 3 percent on the news, while AMD’s stock is down more than 5 percent.

Image: JiahuiH/Flickr