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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (62504)	8/15/1998 9:53:00 AM
From: VICTORIA GATE, MD	Read Replies (1) \| Respond to of 186894

Paul Engel Intel confirms Pentium II shortage By James Niccolai and Andy Santoni InfoWorld Electric Posted at 6:03 PM PT, Aug 14, 1998 Intel is having trouble meeting orders for its 266-MHz and 300-MHz Pentium II processors, which are used to power commercial and business desktop PCs, a company representative confirmed today. Intel said it expects to catch up with the demand by late September or early October, and an industry analyst said the shortage is likely to have little or no impact on the price and availability of PCs for end-users. "If any, the impact will be real short lived," said Kelly Henry, an analyst with International Data Corp., in Framingham, Mass. Intel managed to fill all of the orders placed by its manufacturing customers at the start of the quarter, but underestimated how many chips it would need to meet supplemental orders placed during the quarter -- what Intel calls "turns orders," Intel representative Michael Sullivan said. The company is in the process of winding down the older 0.35-micron manufacturing technology that it uses to make the 266-MHz and 300-MHz chips, which are at the slower end of the Pentium II speed range. Transitioning to a new 0.25-micron manufacturing technology while at the same time trying to hit the "moving target" of OEM demand is a delicate process, and the company underestimated how many of the chips it would need to meet the additional orders, Sullivan said. "We're having some tightness in the ability to fill some of the turns orders for the 266 (MHz) and 300 (MHz)" chips, Sullivan said. Supplies of 0.25-micron parts, with 333-MHz speeds, are better, another Intel executive said. As a result, Intel customers will have to be more accurate in planning their orders, the executive said. "They'll have to forecast their needs." Intel said the shortage is unlikely to affect its financial performance for the quarter.