Intel running short of Pentium 4 chips

Intel is having trouble keeping up with demand for its Pentium 4 processor, leaving some customers and retailers short of the...

Intel is having trouble keeping up with demand for its Pentium 4 processor, leaving some customers and retailers short of the chips in the run up to the end-of-year holiday sales season.

"At this time, demand is stronger than our supplies," said Hisashi Nagai, a spokesman for Intel KK, the company's Japanese subsidiary. Nagai said a strong jump in demand from October surpassed the company's estimates and left factories unable to fulfil orders.

"Pentium 4 processor demand is very strong and we are increasing the volume," Nagai said. "Factories are [increasing production] and we expect to catch up at the end of the year."

Demand for the processor doubled from the first quarter of 2001 to the second quarter, and in the third quarter it was four times that of the second, said Nagai.

In particularly short demand is the 478-pin version of the chip, one of two types that Intel offers. The other chip, which has 423 pins, is similar but plugs into an earlier type of connector socket.

In Tokyo's Akihabara district - an area thick with stores selling chips and components for computers - some retailers began hanging up "sold out" signs for the 478-pin variant of the chip earlier this week.

In the US, Dell stopped offering the 2GHz Pentium 4 altogether for a short period earlier in November because supplies were lacking, said a Dell spokesman. The disruption lasted only a few days, he said, adding that he was not aware of any ongoing supply problems.

While the shortage of chips may be bad in the short term for PC makers and buyers, the good news is that the problem was caused by stronger than expected demand. After slumping for much of 2001, an upturn in sales of PCs is badly needed by many manufacturers to help turn around sinking business.

One analyst said customers may have focused on buying high-end PCs, choosing systems that they think will last for the longest amount of time. "If more people did that than usual, that would throw the forecast [for Pentium 4 orders] out of balance," said Dean McCarron, a principal analyst at Mercury Research.

The supply issue could signal a strong quarter for Intel, he added. "It looks like there's quite a bit more demand at the top end."

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