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Intel promises better 1GHz Pentium III supply

Denies there's any problem with the chip

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Updated Chip giant Intel is denying rumours that it is running into problems with supplying the latest flip chip Pentium III because it is using the same stepping as the withdrawn 1.1GHz Pentium III.

Resellers and distributors have reported scarcity of the parts for the last three weeks, while posts on Silicon Investor suggest it may be using the same stepping as the 1.1GHz Pentium III, which is C0. However, Intel notified its resellers at the end of last week that availability was improving. (The memo to its resellers is below).

A representative at Intel UK said today that as far as he was aware, there is no problem whatever with the part. It may not even be at that stepping, yet.

Supplies of the Pentium III 1GHz were supposed to vastly improve over August and into September, but the flip chip still seems to be in very short supply. This may be because Intel is giving first priority to its PC customers, before its distie and reseller channel gets a look in.

Sources at Kingston Technology said over the weekend that Intel is making renewed efforts to ensure its distributor and dealer channel gets better treatment in the future.

It has lost face over the last year with major distributors and with a number of resellers who have consistently reported shortages across a wide range of products, mostly boxed microprocessors and boxed motherboards.

Those shortages have continued throughout this year, but senior Intel executives have promised supplies will increase during last, and this, quarter.

One US reseller said that Intel has only recently added a listing (SKI) for the part. When it is looked up on either Tech Data's listing, it comes out looking a lot like this:

"Description: BOXED PENTIUM III 1GHZ 256K 133FSB FCPGA
Status: Allocated, ETA Date: (blank). On order from vendor: Zero. "In other words, he said, it is just plain "not available".

Here is Intel's memo to its dealers:

Intel(r) Boxed Processor Availability Update

September 8, 2000

Intel Confidential Information Disclosed under NonDisclosure Agreement

This is a notice to inform you of the current availability outlook for the Intel boxed processors sold through authorized distribution channels. This
outlook statement is based on current expectations -- it is forward looking and actual results may differ.

We recommend that system integrators contact their authorized distributors for specific availability and pricing information.

Intel Processor Supply Summary

Intel expects that shipments of processors to the distribution channel will increase significantly in 2H'00 vs 1H'00. The ramp of the .18-micron process
technology is proceeding well. At the beginning of Q3'00 Intel had five fabs using the advanced .18-micron process technology. By the end of the year
Intel expects to have eight fabs using this process. The conversion to .18-micron process technology increases the production capacity of Intel's
facilities.

* Intel processor shipments to the distribution channel have increased significantly and we expect to be able to support strong growth in 2H'00.

Intel expects the majority of Pentium(r) lll processor shipments to the distribution channel in Q3'00 to be based on .18-micron process technology.

* Intel expects the majority of .18-micron process technology Pentium lll processor shipments to the distribution channel during Q3'00 to be in core
speeds of 700 MHz and higher as Intel continues to transition to higher performance levels.

* Intel's production priority will continue to be Pentium lll processors although production of .18-micron based Celeron(tm) processors is increasing
throughout Q3'00 as well. System integrators should see tight but increasing supply of Celeron processors in September'00. We suggest that system integrators align their product offerings accordingly.

* Intel continues to position itself to meet strong growth in 2H'00. In the long-term, Intel is planning for growth higher than many industry forecasts
and is investing in production facilities accordingly.
For more specific information about availability of Intel processors for the distribution channel see below:

Intel(r) Pentium(r) lll Processor Transition to Flip Chip-PGA Package

The transition of the Pentium(r) lll processor line from SECC2 to FC-PGA packaging is proceeding well.

Intel expects that about 75% of the Pentium lll processors shipped to Intel authorized distributors in Q3'00 will be in the FC-PGA package. This is expected to increase to about 90% in Q4'00.

Intel plans to continue building limited quantities of Pentium lll processors in the SECC2 package in the second half of 2000. These SECC2 builds will be concentrated on higher core speeds to support Server and Workstation designs until they are compatible with the FC-PGA form factor.

Boxed Intel(r) Pentium(r) lll Processor 1 GHz

Intel is now shipping a boxed Pentium(r) lll processor 1 GHz integration pack. The pack contains a Pentium lll processor 1GHz with attached fan heatsink, Intel VC820 desktop board and 128 MB PC800 RDRAM* memory module. A standalone boxed processor without desktop board and memory module that is expected to work in a broader set of boards and chassis is expected to begin
shipping in Q4. Please check here for future updates.

Boxed Intel(r) Pentium(r) lll Xeon(tm) Processor

In August 2000 Intel introduced the Intel(r) Server Board SBT2. In order to support the unique thermal requirements of the Intel Server Board SBT2 and
Intel SC5000 Server Chassis, Intel recently began shipping new boxed versions of the Intel Pentium(r) lll Xeon(tm) processors 933 and 866 MHz.

These new versions include a custom heatsink to make it easier for channel customers to integrate servers based on Intel Server Board SBT2. Integration
into other server board and chassis configurations that have not been validated with this processor/heatsink combination may cause damage. These
processors have a unique product code to enable you to distinguish them from other Pentium lll Xeon processors."

The situation is different at Ingram to Tech Data. Dealers say the VC820/128MB RDRAM/Pentium III 1GHz
combo is in stock at $1,250. Mind you, as one North American quipped: "Let's not overstate this. They've only got 16." ®

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