Intel CPU shortage cripples the channel

Intel CPU shortage cripples the channel

The Australian channel is set for a month of turmoil as the extent of Intel's CPU shortage begins to unfold.

According to several distributors, supply of Intel's entry-level and slot CPUs has hit dire straits, though solid reasons for the situation are not forthcoming from a tight-lipped Intel.

"There is no chance of getting a slot 500MHz but it is actually still on Intel's roadmap and should still be available. There is a major shortage of socket 500MHz as well," Phillip Tran, Tech Excel's sales and marketing manager, told ARN.

According to a report on UK site The Register, Intel recently told distributors around the world it cannot supply Pentium III parts for the majority of February.

IDC analyst Logan Ringland told ARN he believes the situation favours Intel competitors such as AMD. However, distributors and the white box market will feel the pain, with white box assemblers accounting for around 35 per cent of the market overall.

"I imagine there have been some pretty tough meetings behind closed doors with some of Intel's first-tier vendor partners," he said.

Logan attributes the troubles to "poor planning on behalf of the vendors", explaining Intel and its competitors underestimated the demand for Q4. "It was expected to be slow, but it's taken off," he said.

Tran reports the shortages have hit critical levels this week in Australia, just as Intel announced massive price cuts on a number of products.

"Some prices were meant to drop [this week] but they've remained the same even though Intel has put out new official prices," said Tran.

Tran said the 550 slot 1 was selling last Tuesday at $450. The official Intel price is $400.

Intel confirmed it is finding it tough to keep up with market growth but intoned that it would only be a short-term problem.

"Due to increasing demand, we are tight on supply at the moment but are confident of meeting overall unit demand," was the only comment that an Intel spokesman would give in response to ARN's enquiries.

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