Intel CuMine supply problems a twisted, complex tale

Analysis On Friday, we reported that a large number of manufacturers have been told there will be continuing shortages of Coppermines until June. Intel has 70,000 employees working for it worldwide and a large number of fabrication plants, R&D centres, as well as a large headcount of admin, sales and marketing staff. It's little wonder, therefore, that from time to time things go awry. We'd dearly love to see Intel's supplier list but suspect that getting those details are even harder than finding out its roadmap for the next six months. Which lucky vendor, for example, supplies Intel with its soap, flannels and bog rolls? Who makes its bunny suits? Any of these factors going terribly wrong could all have an effect on Intel's ability to supply enough microprocessors for the market. Rather more seriously, Intel has been engaged in the last twelve months in a massive transition from its current .25 micron technology to .18 micron process technology. At the same time, it decided at some point last year to ditch its Slot One (SECC2) packaging and move to a flip-chip (FC-PGA) socket 370 model. This change (and we're just guessing here) presumably happened simultaneously with its move to .18µ process and was, is, compounded by a number of other issues. In February this year, thanks to a piece in Electronic Buyers' News, we learnt that Kyocera, one of the world's largest suppliers of ceramic packaging, had declined to do business with Intel because it felt the fractions of a penny it was getting was just not worth the hassle. There are also shortages on crystals and other components which go to make up microprocessors. Sumitomo had taken a similar stand with Intel a few weeks earlier. Although we asked Intel and Kyocera at the time about this problem, the firm declined to comment on these issues. Intel's problems, aside from its own move to a different packaging and process, also found itself in something of a learning curve on the flip chip process. Although the idea has been around for many years, pioneered by the likes of IBM and Digital, this, as far as we are aware, is the first time Intel had extensively committed to this type of packaging. Then there are the marchitecture issues, and in some ways these have put more pressure on Intel than any amount of problems with suppliers and technology. It was clear, around August or September last year, that AMD, far from making a hash with its Athlon microprocessor, was actually executing on its plans pretty well. Before then, Intel had made all of the running and in fact the Coppermine processors it launched on 25 October 25 last year were originally slated for the end of the year. That announcement had all the symptoms of a panic move by a panicked management, and Intel's rush to get 800MHz, then 1000MHz Coppermines out of the door also gave the strong impression to the outside world that this was a rush job. Given these problems, the difficulties Intel has had with the i820 Camino and other of its chipsets are just a sideshow. What is totally extraordinary to outsiders like ourselves is that a series of problems, some of which were outside Intel's control and some of which were definitely the firm's fault, have opened a wide window of opportunity which AMD looks like it will use to the full. Distributors and smaller system builders were the first to feel the Intel pinch, and while they were suffering, AMD was schmoozing with the channel like never before. That pattern is continuing, it appears. The PC builders who alerted us to the latest shortage of Coppermine processors have customers and need to fulfil orders. Some, in fact quite a large percentage, of those customers, are Intel loyalists and simply do not want to use AMD chips. Dell has always been regarded with deep suspicion by a cross section of the PC industry - not just the channel but also IBM, Compaq and the like. If Dell is continuing to get the lion's share of Intel's output of microprocessors, that will antagonise these firms ever the more and likely throw them further into the arms of Jerry Sanders' AMD and its performing Athlon. Intel's results are out tomorrow evening and will bear closer scrutiny than ever. ® Related Stories Disaster hits Intel Coppermine supplies Caminogate: Will the horror never end? Links EBN's story on substrate shortages EBN's story on other shortages