Intel suffers mother of all shortages

Intel suffers mother of all shortages

Intel has recalled over one million of its 820 motherboard chipsets which is set to increase the already critical problem of component supply, according to local integrators and assemblers, who claim smaller companies are being squeezed out of the channel as parts become increasingly difficult to source.

Intel announced it would replace motherboards that have a defective memory translator hub (MTH) component on its 820 chipset. The MTH is only used with motherboards utilising SDRAM; RDRAM-based systems aren't affected by the problem, according to Intel, which claimed it had identified system noise issues that can cause systems to reset, reboot or hang. The defect may be present on motherboards that were shipped since November, said Intel's national marketing manager Phillip Dows, played down the effect the recall could have on the market.

"There are a variety of motherboards in the market which support the Pentium III processors and there are a range of third parties processing products, so we don't foresee there will be too great a problem," Dows said. "Worldwide, the number of units is under a million. In Australia, it is less than a thousand and many third parties also process products which support the processors."

Integrators say concerns about the recall are secondary to a chronic shortage of other components which the are experiencing - particularly CPUs, DVDs and CDRWs. This, some say, is actually forcing smaller channel companies out of the market.

"Intel are really starting to lose the plot and the shortage will not be sorted out until after June," said MBI Computers purchasing manager, Nathan Anderson.

"But AMD is not much better," he added. "It is very frustrating - you can put in an order for 100 CPUs and only get 10 back in a shipment."

Anderson said many companies were sourcing components from Asia because the Australian supply had all but dried up.

"We do a lot of tenders and when you cannot rely on your components, it makes things pretty tense. We try and overcome this by holdings three times the stock levels and buying from everywhere we can. MBI is lucky because we are a medium-sized business, so we have a little more pull with distributors, but smaller operators have to deal with some pretty shady suppliers."

He said while there was an ongoing memory shortage, components such as CDRWs and DVDs were almost impossible to order in any quantity.

"Suppliers actually laugh if you try - it is pretty woeful," he said. "Australia is such a small market compared with the US and Asia. The large players end up importing the parts directly from overseas, and there are some components coming in from Asia."

Dows said Intel was committed to its boxed processor market and had ramped up production to deal with the chip shortage.

"We have built that market in many ways, and we take it very seriously. We are working very hard to make sure we get back on track," he said.

"We are ramping up our production in our plants to deal with the demand. In the transition phase, we are trying to make sure our older products are freely available," he added.

"The key is communication. We have a range of secure services our customers can log onto which will help them when they are planning their bills."

But Anderson said the chip shortage would make it easier for emerging companies, such as Via Technologies and their Cyrix chipset, to break into the market.

"I think if Cyrix can get its act together they can make leaps and bounds in the market," he said.

ASI Solutions' product manager Darren Miller, said the CPU shortage had greatly affected the company.

"We are contractually bound to deliver a rollout for companies and a shortage such as this has serious impacts on our business. It is a global problem, and Intel, to their credit, have kept us informed every step of the way.

"But the market seems to have all but dried up across the board. There are shortages on motherboards, and CDRW drives and DVDs. It is the most volatile period ever in the industry - we have never had so many component shortages at once. The only thing to do is listen and plan accordingly."

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