Intel confirms Pentium II shortage

Intel is having trouble meeting orders for its 266MHz and 300MHz Pentium II processors, which are used to power commercial and business desktop PCs, a company spokesman confirmed this week. Intel said it expected to catch up with the demand by late September or early October, and an industry analyst said the shortage is likely to have little or no impact on the price and availability of PCs for end users.

Intel is having trouble meeting orders for its 266MHz and 300MHz Pentium II processors, which are used to power commercial and business desktop PCs, a company spokesman confirmed this week.

Intel said it expected to catch up with the demand by late September or early October, and an industry analyst said the shortage is likely to have little or no impact on the price and availability of PCs for end users.

"If any, the impact will be real short lived," said Kelly Henry, an analyst with International Data (IDC).

Intel managed to fill all of the orders placed by its manufacturing customers at the start of the quarter, but underestimated how many chips it would need to meet supplemental orders placed during the quarter -- what Intel calls "turns orders," Intel spokesman Michael Sullivan said.

The company is in the process of winding down an older manufacturing technology that it uses to make the 266MHz and 300MHz chips, which are at the slower end of the Pentium II speed range. Transitioning to a new manufacturing technology while at the same time trying to hit the "moving target" of OEM demand is a delicate process, and the company underestimated how many of the chips it would need to meet the additional orders, said Sullivan.

"We're having some tightness in the ability to fill some of the turns orders for the 266 (MHz) and 300 (MHz)"

chips, Sullivan said.

Intel said the shortage is unlikely to affect its financial performance for the quarter.

Intel, in Santa Clara, California, can be reached on the Web at http://www.intel.com/.

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