Rising demand puts Intel’s new chipset in short supply

TAIPEI: Semiconductor giant Intel Corporation said on Monday a new chipset that slashes the cost of its Pentium 4 processor was temporarily in short supply in the Taiwan market due to rising demand.

"If you're talking specifically about a hot item, like the 845, it will be very tight," Intel's Asia-Pacific general manager, Jason Chen, said of the chipset's supplies in Taiwan. "Overall for the whole quarter we believe we will be able to supply the market demand, but we believe we will see some short-term tightness," he told reporters.

Taiwan's computer motherboard makers, which accounted for some 70 per cent of global output in 2000, are key consumers of chipsets that help the computer's microprocessor brain communicate with the rest of the PC system. Analysts have estimated that the 845 chipset, which was introduced last month, could translate into a 12 per cent discount on a $1,000 computer system and generate more demand in the dismal personal computer market.

The product is also Intel's chief weapon against upstart local chip designer VIA Technologies. Chen said he did not know when demand and supply for the 845 would be in balance, as production was being boosted while orders continued to flow in, but noted that a new facility in China was starting to supply the hot product.

In September, Intel said it would invest another $302 million in a microchip packaging and testing plant in Shanghai, which would put the finishing touches on 845 chipsets in China. "We are pushing them hard to give us more, so we can have some more 845s," he said.

VIA's counterpart to the 845 chipset led to a patent infringement lawsuit from Intel, which VIA countered with suits of its own against the U.S. firm. Intel opened a chipset warehouse in Taiwan in April, its first such warehouse in the world that promises to deliver products within 24 hours.

(C) Reuters Limited 2001.