Chip shortage leaves vendors struggling

A sudden shortage of Intel Pentium II 266MHz and Pentium II 300MHz CPUs has left local PC assemblers struggling to meet orders. The processors are in short supply because the company that provides Intel with the plastic cartridges for the CPUs has missed several shipments. Large local PC companies such as PC Direct and Cyclone Computers are concerned that they will soon run out of stock, while some small assemblers have already had to cancel orders.

A sudden shortage of Intel Pentium II 266MHz and Pentium II 300MHz CPUs has left local PC assemblers struggling to meet orders.

Intel says the 266MHz and 300MHz processors are in short supply because the company that provides Intel with the plastic cartridges for the CPUs has missed several shipments.

Large local PC companies such as PC Direct and Cyclone Computers are concerned that they will soon run out of stock, while some small assemblers have already had to cancel orders.

In a situation typical of smaller assemblers, Alexandra-based Doug Griffiths of Computer Central had to cancel four orders last week because Intel could not supply the CPUs.

Christchurch-based PC assembler Cyclone Computers has given multiple quotes based on PII 266MHz machines. Managing director Richard Morgan is worried that if the problem drags on, the company won't be able to fill orders. At the moment, Cyclone is trying to source the scarce CPUs directly from the US. Morgan says Australian assemblers are experiencing similar problems.

New Zealand's largest PC assembler, PC Direct, started feeling the effects of the shortage two weeks ago. "It's quite a large range of products which are affected and we're working closely with Intel to sort through the problem," says account director Rowan Schaff.

"Luckily we hold quite a bit of stock so we've had a certain amount of buffer, but we hope it will be resolved next week."

Scott Gilmour, general manger of Intel New Zealand, admits that August will be "tight", but hopes September will be better.

"We're trying to recover as fast as we can, but it's a worldwide problem."

International brand names are leveraging buying power and financial muscle to get around the dearth.

Erin Mikan, product line manager with Dell Australia, says the company has been coping with a shortage of PII 266MHz chips by offering customers PII 300MHz machines at the 266MHz price. So far Dell has not noticed a shortage of 300MHz CPUs.

Compaq New Zealand marketing communications director Tony Lambert says as Intel's largest customer the Houston-based PC maker has been able to ensure a supply of CPUs in question.

He says the Pentium II 266MHz is currently Compaq's biggest seller on the desktop.

Some industry players are accusing Intel of being too eager to phase out production of the chips to make way for forthcoming releases.

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