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Hot potatoes

Hot potatoes

One of my favourite winter work-time pleasures is walking around the corner to the takeaway shop and picking up a bag of freshly cooked hot chips. You know the type - crispy, golden brown, steaming away and screaming to be eaten.

But one look at a pile of tired, old, lukewarm, soggy chips and the mind turns to alternatives like a hot pie or pasta dish.

Nagging Intel supply issues and the hype surrounding a bout of re-marked AMD chips have highlighted the ongoing critical and sensitive nature of CPU supply to third-party OEM or PC assemblers in Australia.

CPUs are exactly like my hot chips. The older they get, the less appealing they appear. The crime is that even the stale varieties are hard to find.

The critical thing for Intel is the chip shortage has arguably reached a stage now where AMD has a real chance of being seen as a credible alternative - its chips appear hotter.

However, as Jeanne-Vida Douglas explores in her lead feature "Chips on their shoulders" (see page 73), the Intel supply debate has many layers.

On one hand, Intel says it can't be held responsible for the short supply, arguing forecasting in an age of global manufacturing and distribution is difficult. But hang on a minute, this is Intel we are talking about here.

Intel's dominance is almost unquestionable. It has alliances and supply relationships with every major vendor and distributor in the world. If it can't afford to dedicate a few more people to managing the supply-and-demand equation then there is something seriously wrong.

The real issue, in my opinion, again gets back to the hot chips analogy. The difference between the latest 700 odd MHz chip and a 500MHz number can be in the order of $400. If Intel floods the market with the latest chip, some months down the track PC assemblers will still be ordering old stock and not filling Intel coffers with orders for the latest CPUs.

Meanwhile, these assemblers or small-time OEMs suffer in silence for fear of losing Intel certification.

As one manager commented: "I don't want to say anything bad about Intel on the record."But this debate is not about whether Intel is bad or which manufacturer is better. Ultimately, customer satisfaction and profit margins dictate a reseller's satisfaction when it comes to one of the most important components in PC assembly.

This leads us to AMD. Things might be looking up for Intel's biggest competitor in the face of the market leader's woes, but if the re-marking scam becomes widespread, the PR-ramifications will hurt its sales ambitions. There are already a number of Web sites dedicated to investigating the re-marking issue and hobbies such as CPU over-clocking. Whatever the reason, Intel needs to understand resellers think its behaviour is just not good enough.

From where I sit, the real differences between AMD and Intel are not technical.

Supply and market perception will dictate if resellers can help AMD secure a healthy slice of the market to keep competition alive and well.


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