Intel partners still plagued by shortages

Intel partners still plagued by shortages

The PC market continues to suffer massive supply shortfalls, with the latest casualty being the CPU.

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

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

Ironically, the shortages hit critical levels last week, just as Intel announced massive price cuts on a number of products.

`[Last week] some prices were meant to drop but they've remained the same even though Intel has put out new official prices (see page 18),' said Tran.

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

`At the end of this week the prices will increase further because everyone already has their allotment.'

Intel confirmed it was finding it a bit tough to keep up with market growth but intoned that it would be only 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.

The situation has been brewing since November, according to Edwin Tien, product manager at Ingram Micro, though he still has no specific idea of causes and thus solutions.

`The demand in the market is much bigger than Intel projected and they are in transition from a slot 1 format to a socket format. But Intel is being very uncommunicative on this. We don't really know what is happening or what Intel is doing about it,' said Tien.

His best guess is that February will be a tough month but that the situation will ease in March, though why and how he can't say.

`Maybe they'll increase their production plants or capacity - who knows.'

And as is typical when commodity supplies dry up, a snowballing effect set in. In this instance, AMD will also experience shortages and price increases as desperate people resort to Intel's arch rival for CPU supply.

`There is no solution because there is a worldwide shortage. We are trying to source them through Hong Kong and Canada or we try to push AMD, but there are shortages everywhere at the moment,' cried Tran.

In the meantime, distributors are bracing for a lean couple of months, though it will be customers who will have the most to complain about, said Tran.

`We can only carry the price for a certain amount of time and because the hikes are so significant the customer will feel the effects in about two weeks.'

Tien is confident that Ingram Micro can push other CPU models to cover shortages in Intel's most popular models but inevitably they will be more expensive. `People will still be able to get CPUs but they'll pay for it.'

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