System builders take brunt of Intel PIII shortages

The shortage of Pentium III microprocessors is set to hit system builders worldwide, as more distributors report their February backlog of box processors is being slashed and burnt. Last week, we reported that a major European distributor complained bitterly that it had been told 13,000 boxed units of Pentium IIIs that it expected in February had been cut. And now further confirmation has come from the US, which reports that giant distie Avnet had said supplies of Pentium IIIs will be tight during the entire quarter, according to US publication Electronic Buyers' News. System builders generally buy their microprocessors in boxed units, while PC manufacturers use a scheme called Ship Direct to order microprocessors in trays from Intel. While PC manufacturers we have talked to suggest that they are receiving allocations of their microprocessors, they add that supplies are not as free flowing as they would like. But the chips, whether in trays or in boxed units with the Intel logo, are the same parts, suggesting that the Intel PC customers are being fed while the channel partners are being starved. Intel never breaks out figures for which microprocessors go through its channel partners and which through its PC manufacturing customers, although in some territories it is suspected that system builders account for the lion's share of Intel business. ® Intel cancels Pentium III supplies for February