Intel denies coppermine production flaws

Intel this week denied it is suffering problems in implementing the new 0.18 micron manufacturing process in its microprocessor plants. While conceding the company has difficulty meeting all of the demand for the 15 new Pentium and Xeon processors it announced this week, the chipmaker insisted that this is not due to process reliability issues.

Still, reports on Wall Street about supposed manufacturing problems causes a steep sell-off in Intel shares on Wednesday. Jonathan Joseph at Salomon Smith Barney said he doesn’t expect Intel to be able to fill all its orders. "We are getting multiple reports that Intel is still having some manufacturing issues this quarter and is having trouble meeting all the commitments it made to customers." Intel spokesman Howard High said the company isn't having manufacturing problems, though "there is some tightness in various supplies because people want to buy more than we can make. We have said that the fourth quarter will be stronger than the third quarter,'' he said. Chip industry insiders said it would have been unlikely that Intel would have made the Coppermine product announcement this week if production flaws had been serious.