A shortage of Intel's premium Pentium 4 computer chips is holding back local firms, analysts and industry sources said yesterday. Some Taiwanese motherboard makers say their sales of Pentium 4 compatible products could fall as much as 20 percent short of original forecasts due to the lack of supply.
Personal computer makers lacking the chips say they are turning to Intel's main rival, Advanced Micro Devices (AMD) in a bid to keep up with sales.
Intel says the shortage could last into the second quarter.
"We are seeing tightness," said Stanley Huang, the company's director of marketing and technical services in the Asia-Pacific region, at a press conference on Tuesday. "I'm sure we'll catch up with demand pretty fast ... I can't say whether it will be March or when, but we will catch up with demand."
The world's largest chipmaker plans to ramp up Pentium 4 production at a state-of-the-art 12-inch chip fabrication plant sometime during the second quarter of this year. Huang said output from that plant should solve supply issues.
Taiwanese PC manufacturers and motherboard makers say the ongoing shortage has led more firms to choose products from AMD.
"Some companies here have an inventory excess [of Pentium 4 chips] and they can also use CPUs from AMD and other companies instead," said Alex Huang, a computer industry analyst at Dresdner Kleinwort Benson in Taipei.
Huang said some firms have told him that the price and performance ratio for AMD is better than Intel. The ratio measures how much bang a consumer gets for their buck.
Intel officials said demand for Pentium 4 chips spiked much faster than anticipated last year and that it has been forced to play catch-up ever since.
Sales of the popular Pentium 4s surpassed those of its predecessor, Pentium III, in October. The company said heavy demand for the CPUs should help its sales during the three month business quarter ending Dec. 31 to top third quarter results. Official financial results will be announced next week.
A statement from the company said it estimates there are "nearly 450 million people using PCs that run at 700 MHz or [lower speeds]. While those PCs were state of the art two to four years ago, they pre-date the MP3 revolution, streaming video on the Internet, recordable DVDs and the online gaming phenomenon."
The release said the company believes there are still millions of potential customers for the new, faster 2.2GHz Pentium 4 chip launched Tuesday in Taipei.
Most local companies were not willing to speculate at this point how much the shortage might hurt their business in the first quarter.
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