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Intel chip shortage ruins Christmas cheer

Intel chip shortage ruins Christmas cheer

An ongoing shortage of some Intel CPUs has led to lost business even for genuine Intel dealers. After winning valuable orders, this has proven to be heartbreaking, especially for small and medium resellers.

The recent experience of one reseller who orders CPUs on demand highlights the problems being faced in the channel.

The proprietor of a Perth value added reseller told ARN the cheer was taken out of his Christmas when a very competitive order for 15 systems was cancelled after he had spent a week unsuccessfully trying to source Intel PII 350MHz CPUs.

John Sica, manager and franchisee of Navada Computer Systems Burswood, said that after being advised by his normal supplier, Synnex, that stock would not be available for two weeks, he contacted the other Intel distributors, Tech Pacific and Todaytech, only to find no PII 350s were available.

Different procedure

When four of the required 15 CPUs even- tually arrived, the stock was of a different housing type than normally used. Sica was later advised it was "trade stock" and, although authentic, required a different procedure to install, thus causing further delays and frustration. With Navada not being able to complete the order, the customer went to another hardware supplier.

"This is not the only time it has happened and there are several cases I am aware of where other resellers have lost big orders because of short supplies of CPUs."

Lost business

Intel sales manager Archie Wilson expressed his concern that resellers were losing business because of shortages and invited any authorised Intel reseller in this position to contact him directly.

Managing director of Intel distributor Synnex Frank Sheu said that the supply of Pentium II 350 processors "has been a mess for most of this quarter". He added that the company had only been able to supply approximately 50 per cent of the requirements of its channel customers.

Sheu was aware of several instances where resellers had orders cancelled because of the inability to supply processors. When speaking to ARN last week, however, it had secured a stock of 10,000 units, with 1000 in the Perth warehouse. "At any one time we carry $15 million of Intel CPU inventory," said Sheu.

Jack Zhong, managing director of Todaytech, acknowledged that it supplied some stock to the reseller that may have been different from that which the distributor normally uses, but it was nevertheless genuine standard Intel stock direct from the North Ryde warehouse.

"Having only recently been appointed as a distributor, it is difficult to comment on the supply situations, but it is clear that shortages will continue to occur. Our company will do its best to help our channel customers when these problems arise," Zhong said.

When contacted by ARN, the Tech Pacific Perth office confirmed they still had none of the PII 350 CPUs in stock.

A spokesperson for Tech Pacific said that there was a different version of the 350 MHz PII being rolled out and that stocks would be available shortly.

It is understood that by early 1999, the entry-level PII standard will be 400MHz, so integrators will need to either secure their supplies of lesser processors before taking system orders or sell up to the available version.


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