Paul, another article about Intel sold out. This one even implies that the biggest shortage problem might be at the high end of PII. Kurlak wrong all the more.
Oh, also said AMD got some business Intel couldn't fill because of the shortage. Nice of the lion to leave a little for the jackals, hyenas, dogs and vultures, huh? Uh, no, I wanted ALL the money on the table! Fix it next time!
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Intel Chip Shortage Makes Holidays Hard for Some PC Makers
Santa Clara, California, Dec. 11 (Bloomberg) -- Intel Corp.'s
microprocessors are in short supply this holiday season, and some
personal-computer makers say the squeeze is costing them sales.
Intel, which sells more than 80 percent of the chips used in PCs, didn't
expect a surge of year-end buying. Consequently, the world's biggest
chipmaker isn't churning out enough of some high- performance processors
to meet demand. ''We're currently product-constrained,'' said Robert
Manetta, an Intel spokesman. ''We expect to be meeting all customer orders
by the end of the quarter.''
That could be too late for small computer makers such as Boldata
Systems and distributors like Pinacor, the PC-sales business of
MicroAge Inc. These companies say the scarcity of the most powerful
Intel chips is depriving them of sales in the critical fourth quarter,
when about a third of all PCs are sold. ''We're suffering,'' said
Anthony Cyplik, director of computer assembly at Pinacor. ''If we had
more chips, we'd have more business.''
Pinacor, based in Tempe, Arizona, sells unbranded PCs, or so- called
white boxes, to computer dealers, who then sell them to small and
medium-sized businesses.
While Pinacor may not be a household name, white-box makers as a group
account for about a third of all PCs shipped worldwide, according to
International Data Corp., a Framingham, Massachusetts-based technology
research firm.
Size Matters
The dearth of Intel chips isn't hurting Compaq Computer Corp., the world's
biggest PC maker, or rival Dell Computer Corp., the top direct-seller. ''We
haven't had any problems, and we don't expect to have any problems,'' said
Compaq spokesman Alan Hodel.
For smaller makers, though, getting chips is often feast or famine.
Processors were plentiful earlier this year, when it looked like a
slowdown in the global economy would hurt PC sales. Then the holidays
neared and U.S. consumers and businesses started buying.
Third-quarter PC sales worldwide rose 12 percent from the previous
quarter, according to Dataquest, a San Jose, California- based research
firm. Houston-based Compaq's computer and equipment sales rose 36
percent to $7.28 billion in the third quarter from the second quarter's $5.37
billion.
Off Guard
The late buying binge caught Intel off guard.
In July, Intel said its third-quarter sales would be little changed to slightly
higher than the second quarter's $5.93 billion. Then, in September, it said
sales would be 10 percent higher because of stronger-than-expected
demand.
Santa Clara, California-based Intel raised its forecasts in the fourth
quarter, too. It first said that sales would be only slightly better than the
third quarter's, then predicted that sales would increase by as much as 10
percent.
The flawed sales forecasts spilled over into production plans. It takes Intel
about three months from start to finish to make a computer chip from
silicon wafers, and three months ago, Intel executives weren't expecting
such happy holidays. ''We didn't start enough wafers three months ago to
meet demand,'' Intel spokesman Manetta said. ''Things can change
dramatically in a couple months.''
Recurring Problem
Chip shortages aren't new for Intel. In August, some customers had trouble
getting chips that run at 266 megahertz and 300MHz. At the time, Intel was
pushing top-of-the line processors that run at 333MHz, 350MHz and
400MHz because they're more profitable.
Now, with PC sales booming, computer makers say there are shortages of
the more powerful chips, according to Intel customers. Intel declined to
say which chips are in short supply.
Eugene Kiang, president of computer maker Boldata Systems in Fremont,
California, said the shortage is costing him money. ''If you're not a first-tier
customer, you get screwed,'' said Kiang, who expects sales of $300
million this year, compared with $12.3 billion for Dell. ''We could have a
much better Christmas season if we got all the Pentium IIs we wanted.''
Kiang said he's been buying Pentium IIs from brokers who buy and sell
chips made by Intel and others. The brokers charge him more, and Kiang
expects to spend an extra $2 million on chips this quarter alone as a result.
That makes it even harder to compete with giants like Dell and Compaq.
''We're at the bottom of the food chain,'' Kiang said.
Computer-components makers also are feeling the pinch.
Jeff Howard, vice president of sales and marketing at EFA Corp. of
America, said its sales of motherboards -- the circuit boards that hold the
microprocessor and other crucial chips -- fell because of the shortage of
Intel processors. The Santa Clara company compensated by selling
motherboards based on chips from Intel competitors, such as Advanced
Micro Devices Inc.
Intel says it doesn't favor big companies when supplies are tight. The
company tries to meet demand from all its customers, from Dell down to
mom-and-pop shops. ''We try to keep a level playing field,'' said Intel
spokesman Tom Waldrop. ''We do the best we can.''
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