AMD Expects To Resolve Processor Shortages In 1Q

The Sunnyvale, Calif.-based chip maker sent a letter to some of its partners in mid-December stating that several of its desktop processor models were in high demand and would continue to be difficult to obtain, said two system builders who asked to remain anonymous. One of those system builders said the note specified the Athlon 64 3500, the 3800, the dual-core X2 3800 and the lower-end Sempron 2600 and 2800 as being in tight supply.

An AMD spokeswoman acknowledged shortages in the low-end desktop space but would not comment on specific model numbers affected. In a statement e-mailed to CRN, the spokeswoman said: “AMD is experiencing unprecedented demand for our desktop processors and this unprecedented demand has depleted our supply of packaging components.”

AMD is working with its packaging suppliers—those that manufacture the components that house the CPU silicon—to ease the shortage. The spokeswoman said AMD has had no problems manufacturing enough silicon to meet current demand and is confident that all sales requests can be met in the first quarter.

AMD isn&'t the only chip maker fighting supply issues. Manufacturing constraints forced Intel to stop making some chipsets for desktop processors. In October, Intel told CRN it would, for the first time in years, use a third-party supplier to build chipsets for some of its desktop motherboards. Intel, though, has promised channel partners that it would meet demand for processors during its rollout of dual-core chips, as well as the 2006 rollout of new Intel-based systems by Apple, Cupertino, Calif.

Getting specific processors and motherboards can be particularly important to system builders and VARs that service corporate and government accounts. Those types of customers often standardize on one particular system build to save on IT support costs. They contract with a supplier to receive a particular build for a set period of time, and if there is a significant change in the system build, a VAR or system builder may have to rebid the contract.

AMD recently opened a new fab in Germany to help it meet demand as it processes more orders for server, desktop and notebook CPUs.