Morning Bill,
more comments on how iNtEL will fix DELL's problems short term
and long term.
They hope to have FAB11 eeking out a few more by the end of the quarter, and
FAB22 next year, maybe even experimenting with copper and .13.
Also discusses DELL can't deliver a floppermine 800 system until March 9. And these
suckers were announced December 20th?
zdnet.com
Intel chip shortage claims another victim
By John G. Spooner, ZDNet News, PC Week
January 26, 2000 2:57 PM PT
Even as Dell Computer Corp. was blaming chip shortages for a fourth-quarter
shortfall, Intel Corp. was saying it expects difficulty meeting demand for its
Pentium III and Celeron processors over the next few months.
For PC buyers, this means a longer wait for systems with certain processors. And it
could be a hit to earnings for some PC makers.
"Right now, the industry is trying to recover (from the busy fourth quarter),
including Intel," said company spokesman Howard High, interviewed before Dell
announced its shortfall Wednesday afternoon. "There will be tightness in parts of
our product line throughout about the next two months."
The tightness, he said, is caused by Intel seeing higher numbers of orders from PC
makers than it expected to have, so-called upside demand.
"We've been able to meet our commitments. But we hadn't, in Q4, been able to meet
upside demand," High said. "We're still, as a company, working to get our capacity
levels up to this (new) level that the industry is building (PCs) at."
Dell's fourth-quarter earnings warning blamed semiconductor supply "inconsistentcy"
for lower-than-expected earnings. Intel was not named -- but the chip maker is the
only supplier of PC chips to Dell.
Dell said that an "uneven and constrained" supply of semiconductor components caused
$300 million in lost sales, primarily of newly introduced consumer products.
It echoed a recent similar warning from PC maker Gateway Inc.
New fab to loosen tight supply
When it comes to specific processors, industry sources say that older Pentium III
chips are in tight supply.
"There are some (chips) in the Pentium III line that are tight ... there are some in
the Celeron lines that are tight ... but I don't know on a MHz basis which are
which," High said.
A call to Dell showed that a Dimension PC with an 800MHz Pentium III processor,
Intel's 820 chip set and 128MB of Rambus dynamic RAM would not ship until March 9.
Intel expects that its newest fabrication plant (to be called Fab 22), along with
$800 million worth of updates to its Hudson, Mass., fab, should help ease its supply
situation in the long run.
Short-term relief should come from conversion of the company's New Mexico-based Fab
11 to manufacture processors on Intel's 0.18-micron process. This should be complete
by the end of this quarter, High said.
Fab 22 will be Intel's first fabrication plant to use 300mm wafers. The wafers,
12-inches in width, should yield about 2.25 times more chips than the current 200mm
or 8-inch wafers used by Intel.
"It should crank somewhere between 35,000 and 40,000 wafers per month," High said.
The actual number of chips on each wafer depends on the kind of processor being
manufactured. A single wafer would yield more mobile chips, for example, than
higher-end Itanium chips, because the upcoming Itanium will be physically larger.
Packaging woes
While the improvements will give the company a needed boost in manufacturing
capacity, that capacity may not be the only answer to supply issues.
Intel, sources said, is experiencing problems transitioning its Pentium III
processor to a different package, called "flip chip." It appears that the packaging,
delivered to Intel from an outside firm, has been delayed for some versions of the
chip.
The package mounts the chip on top of a board, whose back side sprouts 370 pins,
allowing the chip to be mounted to Intel's Socket 370. Celeron processors have been
using this type of packaging since last year.
While the packaging technique itself is not new, it is being employed by Intel for
the first time on the latest-generation Pentium III "Coppermine" processors, aimed
at small-form-factor PCs.
Intel's High said he was not aware of packaging problems with the Pentium III. He
said reports of the issue likely stemmed from shortages related to demand.
On Fab 22
Fab 22, located in Chandler, Ariz., will not only be Intel's first to utilize 300mm
wafers, it will also be the company's first to deliver its 0.13-micron manufacturing
process and copper metalization. Copper metalization changes the interconnects that
link transistors inside a chip from aluminum to copper, yielding a performance
increase.
Fab 22 will come online in 2001 using 200mm wafers, but quickly transition to 300mm.
It will manufacture mobile, desktop and Intel's forthcoming IA-64 or Itanium
processors.
"It should be a significant productivity improvement. ... We'd expect to save about
30 percent as opposed to building chips on a 200mm wafer," High said.
Intel now has 14 fabrication plants in operation. |
