Intel Ramps Up New Board To Ease Shortage

Though encouraged about a potential increase in supply, Doug Phillips, vice president of products and solutions at Seneca Data, Syracuse, N.Y., said he is still unclear if there will be a sufficient number of boards to completely resolve the issue. “There is a big demand for value products by system builders.”

Intel, on its own, has been unable to produce enough chipsets to fulfill demand for its motherboards. By using an ATI part—the first time Intel has done so in at least a decade—the chip maker is poised to relieve a supply problem that has been plaguing system builders for several months.

“It&'s really been a tough spot for us,” said Tom Derosier, co-owner of system builder CPUGuys, Hanson, Mass. “We have to make this stuff work, and we have to have product to make it work.”

System builders have been working around the problem by either upselling to higher-end options or sourcing from other manufacturers. But many system builders said they prefer to use Intel-branded motherboards. There is a three-year warranty on the boards and the kind of service and support that is needed to compete against top-tier vendors, several system builders said.

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Intel does not comment on the specifics of third-party parts used in its products. But Steve Dallman, Intel&'s senior director of channels, confirmed that a board with a chipset from another vendor is currently in production. Volume should be ramping up over the next several weeks, he said.

An ATI spokeswoman said the company is supplying the Radeon Xpress 200 chipset for this board and would be producing “several million” each quarter. Pricing and availability for the boards were not available. One system builder said they should be priced competitively with similar Intel-only products.

Dallman said Intel this quarter will initiate co-marketing activities with distributors to promote third-party alternatives to Intel motherboards. “There are lots of options out there to get motherboards,” he said.

Intel has had difficulty meeting chipset demand as it has switched manufacturing processes and was making components on larger 300mm wafers. Intel pulled back production of low-end chipsets during the quarter so it could focus on the more lucrative high-end components, company executives said.

Intel also is expected to use a third-party chipset for its low-end desktop motherboards that usually power systems at the $299 to $399 price point. The chips would be equivalent to a current Intel part that Intel is no longer manufacturing, the 850 chipset.