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Intel Pentium 4 price cuts put pressure on mobo makers

Panic buying of components begins

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Intel's aggressive Pentium 4 price reduction programme, with big cuts coming on 26 August and 28 October, is frustrating mobo component suppliers.

Here's what's happening: Intel is attempting to ramp up demand for the P4. It's doing that through price cuts and by first sidelining and then retiring the desktop Pentium III.

The trouble is, mobo makers have planned for a less aggressive P4 drive. Talk that Intel's i845 chipset, which hooks the P4 up to low-cost PC133 SDRAM, will be hard to get hold of hasn't helped. The upshot is that mobo makers, keen to be ready for the late August/early September back-to-school sales period Intel is looking to, are ordering parts like crazy from component suppliers whose own business plans are based on the same shallower P4 ramp.

The result: suppliers are expecting certain components to become hard to get hold of during that same August-September timeframe. if that happens, it could push up mobo prices - demand high while supply is low - but probably not enough to counter the P4 price cuts coming on 26 August. If mobo makers keep prices down to avoid appearing uncompetitive, supplies of finished products may be limited.

Most big mobo makers were expecting P4-based products to dominate late Q4 2001 or Q1 2002, based on price cuts scheduled for the latter part of the year. ®

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