Intel has denied reports that its Xeon supply chain is suffering the same constraints as its PC desktop\/laptop business. CEO Bob Swan said during the company's recent earnings call that its inventory was depleted but customers are getting orders.\nThe issue blew up last week when HPE\u00a0\u2013 one of Intel's largest server OEM partners\u00a0\u2013 reportedly told UK-based publication The Register that there were supply constraints with Cascade Lake processors, the most recent generation of Xeon Scalable processors, and urged HPE customers "to consider alternative processors." HPE did not clarify if it meant Xeon processors other than Cascade Lake or AMD Epyc processors.\nAMD must have loved that.\nAt the time, Intel was in the quiet period prior to announcing fourth quarter 2019 results, so when I initially approached them for comment, company executives could not answer. But on last week\u2019s earnings call, Swan set the record straight. While supply of desktop CPUs remains constrained, especially on the low-end, Xeon supply is in \u201cpretty good shape,\u201d as he put it, even after a 19% growth in demand for the quarter.\n\u201cWhen you have that kind of spike in demand, we are not perfect across all products or all SKUs. But server CPUs, we really prioritize that and try to put ourselves in a position where we are not constrained, and we are in pretty good shape. Pretty great shape, macro. Micro, a few challenges here and there. But server CPU supply is pretty good,\u201d he said on an earnings call with Wall Street analysts.\nIntel CFO George Davis added that supply is expected to improve in the second half of this year, across the board, thanks to an expansion of production capacity. "In the second half of the year we would expect to be able to bring both our server products and, most importantly, our PC products back to a more normalized inventory level," Davis said.\nIntel\u2019s data center group had record revenue of $7.2 billion in Q4 2019, up 19% from Q4 2018. In particular, cloud revenue was up 48% year-over-year as cloud service providers continue building out crazy levels of capacity.\nHyperscalers like Amazon and Google are building data centers the size of football stadiums and filling them with tens of thousands of servers at a time. I\u2019ve heard concerns about this trend of a half-dozen or so companies hoovering up all of the supply of CPUs, memory, flash and traditional disk, and so on, but so far any real shortages have not come to pass.\nPerhaps not surprisingly, Intel's enterprise and government revenue was down 7% as more and more companies reduce their data center footprint, while communication and service providers' revenue grew 14% as customers continue to adopt AI-based solutions to transform their networks and transition to 5G.