Feeds

CPU and component famine likely next year

Motherboards, hard drives and other parts constrained too

  • alert
  • submit to reddit

Beginner's guide to SSL certificates

A UK distributor said today that the glut of PC components the industry has seen in 1998 will turn into a famine next year as a combination of circumstances begin to bite the market. Mark Davison, microprocessor manager at Datrontech, said that a lack of investment, coupled with increased demand for PCs, will lead to shortages not only in memory products, but in CPUs, motherboards and hard drives. He said: "Next year will see the biggest shortage of components we’ve ever seen. There's only a finite amount of production in the world and there are only so many CPUs that can be built. It takes time to build new fabs." He said that it won't just be processors that are affected. Motherboards are also likely to be in short supply. "Distribution customers buy the majority of brands from one of half a dozen vendors," he said. "They themselves have production capacity capped because of raw materials, chipsets and so forth. It's the same with hard drives." He claimed that semiconductor companies are closing fabs faster than they open them. "I haven’t seen any moves predicting an upturn," he said. "The majority of our customers buy from hand to mouth and perhaps they should think of a different business model." The shortage is likely to hit in mid-1999, said Davison. Practically every manufacturer of components had either slowed or otherwise constrained production this year, and the first three quarters were flat. Other factors likely to exacerbate this situation was increased demand from large corporations, and, later in 1999, smaller companies, eager to buy new kit to avoid any problems with the Y2K bug. An Intel representative said: "Big corporations will be buying new equipment in the first half of next year just to be on the safe side. In Q3, they'll consolidate with the equipment they have. Towards the end of next year, small companies will do the same thing." However, he claimed that it was unlikely that there would be constraints on CPU production. However, Intel is shutting Fab 6 in Arizona in Q1 1999, Fabs 7 and 9 in New Mexico in the year 2000, and Fab 5 in Q2/Q3 of 1999. Although Intel's stance is driven by its move to smaller die sizes, the company is known to have put a freeze on recruitment because of demand for its parts slowing earlier this year. It will not give figures on the number of parts it manufactures worldwide. While its competitors are ramping up their production of parts, if demand for PCs increases during next year, Davison’s predictions may well be true. Dataquest has already said it expects to see memory prices bounce back up in the middle of next year due to a similar combination of market forces. ® Click for more stories Click for story index

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.