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To: Tony Viola who wrote (110993)9/23/2000 3:24:12 PM
From: EricRR  Read Replies (1) | Respond to of 186894
 
John, below is the most plausible explanation of what happened I've seen,

TP - no, this was something different. Because of processor shortages, vendors were ordering through multiple suppliers. As supplies started to come through, they cancelled the redundant orders. In the case of Europe, they even cancelled the primary orders in some cases.


Here is my explanation: Six months ago, Intel shafts tier two and channel partners by redirecting Coppermine parts to DELL and other tier one OEMS. This was well covered by the Register.

March 10, 2000:
Dealers and system builders, faced with orders for PCs, found themselves in dire straits because of a lack of processors for their customers. Result? Loss of money. And now second tier vendors, particularly in Europe, are beginning to complain vociferously at their treatment at the hands of Intel, which is now unable to guarantee shipment of processors apart from flavours that their customers don't particularly want. Result? Loss of money again. Further, all these sets of people are now beginning to relay worrying information that while they can't source Intel processors, the Big Five - in particular Dell, IBM, Fujitsu Siemens, Compaq and HP - appear to be having no problems whatever getting supplies from the chip giant. One European system vendor, responding to a story we published yesterday complaining about new shortages of microprocessors, has hit out at Intel for undermining sales and told The Register this morning: "All of this goes against their [Intel's] 'we want to support the little guys because it's good for us' line they spin every time we raise such concerns." He said that the contender, AMD, is "really showing these guys what competition is. The way AMD does business is so much better than Intel you would not believe. Friendly, responsive sales and technical staff that can get things done - not puppets on a centralised European based string that repeat the Intel line at every point."
theregister.co.uk

As a result, these customers were forced to use "inferior" parts from third parties. But the arrogant brass at Intel assumed that these customers would come running back when summoned. It didn't happen.

As a result, Intel had an unrealistic forecast as they showed both the primary and redundant orders as demand.


Intel long ago forgot what the meaning of the word "demand" is. Intel's management has begun believing their own propaganda.

George Orwell "Politics and the English Language," 1946. (butched by an AMDroid, 2000)
resort.com

When one watches some tired hack on the platform mechanically repeating the familiar phrases -- (EDIT) Demand is good, yields are good, ramp is good, makes the internet faster, AMD is an imitator, haven't lost market share (/EDIT) -- one often has a curious feeling that one is not watching a live human being but some kind of dummy: a feeling which suddenly becomes stronger at moments when the light catches the speaker's spectacles and turns them into blank discs which seem to have no eyes behind them. And this is not altogether fanciful. A speaker who uses that kind of phraseology has gone some distance toward turning himself into a machine. The appropriate noises are coming out of his larynx, but his brain is not involved as it would be if he were choosing his words for himself. If the speech he is making is one that he is accustomed to make over and over again, he may be almost unconscious of what he is saying, as one is when one utters the responses in church. And this reduced state of consciousness, if not indispensable, is at any rate favorable to political conformity.



To: Tony Viola who wrote (110993)9/23/2000 8:30:54 PM
From: Road Walker  Respond to of 186894
 
Tony,

Sounds about right.

Now, the the REAL question is the implications of todays situation on future revenue and profit. IMHO, it's a little to early to make any guesses.

John



To: Tony Viola who wrote (110993)9/23/2000 9:29:27 PM
From: Neal Bernard  Read Replies (1) | Respond to of 186894
 
Demand looks like it will improve.
>>>
TITLE : Intel to Place Intel 810 Chipset Orders with TSMC
September 22, 2000 (TAIPEI) -- Intel Corp. and Taiwan Semiconductor Manufacturing Co., Ltd. are expected to forge a close cooperative relationship.

A reliable source has revealed that high-ranking Intel executives have come to Taiwan, and plan to place Intel 810 orders with TSMC.

In addition to Intel 810 orders, Intel, eyeing the vigorous competition in the information appliance and chipset sectors, has been discussing with TSMC the possibility of producing IA-related chip products. Following TSMC's technology upgrade and release of its mass production technology, the company has attracted global IDM manufacturers to invest in TSMC.

Intel is expected to place its Intel 810 chipset orders early next year, and the Intel 815 chipset orders might possibly follow. If Intel's integrated chipsets continue to integrate other functions, TSMC does not rule out the possibility of using 0.18-micron or 0.15-micron processing technology to produce new products for Intel, depending on its choice of next year's products.

As production capacity becomes more efficient, Intel will be able to adopt a more flexible strategy on product price.

Intel's overall orders placed to TSMC are to be substantially boosted early next year.

Both Intel and TSMC, however, did not confirm their cooperation on Intel 810 and IA chips.

Intel has lost market share in the chipset sector to around 50 percent because its supply could not keep up with demand. If Intel takes advantage of wafer foundries' production capacity, it will be able to maintain its dominance in the market, even though it may have to lower its profit margins.

(Commercial Times, Taiwan)
bizns.nikkeibp.co.jp