Already struggling with slips in its mobile line, a minor recall of a recent chipset and inventory balancing issues at the end of the last quarter, Intel has now begun telling customers it plans to delay the launch of its 4GHz Pentium 4 processor, a company spokesman said.
The 4GHz Pentium 4, slated for launch at the end of the year, has been pushed back to the first quarter of 2005, the spokesman said. Though there were no specific reasons for the change, Intel believes that an early 2005 launch would be more realistic time frame for providing an acceptable volume of the processor, he said.
The Santa Clara, Calif.-based chip maker also is re-evaluating its entire product road map to ensure that future launch dates are doable, the spokesman added.
While product slips are never good news, the latest information comes at a particularly thorny time for Intel. Earlier this month, the company postponed shipment of its next-generation Centrino mobile processing platform until early 2005, explaining that it wouldn't be able to produce the product by late this year, as originally planned.
A few weeks earlier, Intel said it had to recall some of its new Grantsdale chipsets, which had been produced under a faulty manufacturing process. But company executives said the issue was minor and was able to be resolved within days.
And during a second-quarter conference call with financial analysts earlier this month, Intel said it had produced an overabundance of wafers from its new 300 mm manufacturing process, leaving it with an inventory imbalance that could force softer pricing.
Not all the news was bad from Intel, however. The spokesman said the company would provide new features to the new Pentium 4, including 2 Mbytes of cache and a faster front-side bus.
Still, Intel's latest slip could open an opportunity for rival Advanced Micro Devices. Frank Pivonka, co-CEO of Assured Computing Technologies, a Bedford, N.H.-based system builder, said a delay with the 4GHz Pentium 4 could impact margins throughout the product line.
"We've transitioned a lot of our customers over to the AMD platform because of issues with Intel," Pivonka said.
Many of Assured Computing's customers haven't opted for the highest-end processor products but instead are "coming in somewhere in the middle," Pivonka noted. "They say, 'I don't need the latest and greatest,' " he said. "[But] every time they release a new processor, it raises the margin on the mid-level."