Intel Plans a Chip-Set Shift

The chip maker will rework its manufacturing plan to bolster the supply of its most popular chip sets.

Intel is reprioritizing its chip set manufacturing, in an effort to keep up with demand for its most popular models, despite the potential for a shift to delay others.

The measure, which the chip giant says will ensure it has enough manufacturing capacity to meet demand popular notebook and desktop chip set models, will lead to at least some shortages of certain other chip sets and could trickle down into delayed orders for some corporate and consumer PC models.

Chip sets provide the equivalent of PCs nervous system and thus are designed to work with a specific family of processors, making them a vital component that cant be easily substituted.

However, Intel Corp., which said during its June second-quarter earnings discussion that its notebook processors are gaining momentum and its chip-set plants are running at full capacity, feels its necessary to give priority to its most in-demand products, a company spokesperson said.

"We have the ability to be flexible and make adjustments to our product" manufacturing schedules, said Bill Kircos, an Intel spokesperson. "Were prioritizing those schedules to best meet demand. That will lead to some temporary shortages on some chip-set products."

Kircos denied reports that Intel would exit parts of the chip-set business. He also declined to elaborate on which chip-set models would be affected by the shifts and thus would be in shorter supply.

Although he did say that Intel would meet its existing commitments, despite the changes, meaning that only orders for additional chip sets over and above those commitments might go unfilled for a time.

Once source familiar with Intels production changes said it will back-burner its low-end 900-series chip sets, including models such as the Intel 910GL Express and 915GL Express, for desktop PCs.

The two chip sets are designed for relatively low-end Celeron and Pentium 4-based desktops.

Intels 840 and 860 series chip sets, which are arguably more popular for corporate and consumer desktops using Celeron and Pentium 4 processors, will not be affected by the changes, the source said.

"Were doing the best we can to meet the demand for the majority of our customers," Kircos said. "We can be pretty quick [to change] and flexible about our manufacturing schedule. In this case its prudent to prioritize."


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