Glut of Intel CPUs, chipsets creates logic mountain

SO MANY Intel CPUs and chipsets are swilling around in the channel that it's affecting the entire PC industry.

But unlike the inventory build up in 2004, it's confined to PC related affairs rather than the global electronics industry, said Rosemary Farrell, an analyst at research company iSuppli.

Farrell said that excess semiconductor stockpiles rose to $2 billion in Q2, up 77.6 per cent from the $1.1 billion in Q1. But the semiconductor mountain shouldn't ring any alarm bells, said iSuppli. "The inventory rise in 2004 was a widespread phenomenon, while the current run up in stockpiles mainly is limited to Intel," Farrell said.

The problem migrated from the first quarter to the second quarter when Intel started to cut prices to clear out old chips in preparation for new chips.

Farrell said: "This triggered a price war with AMD. With more reductions expected from Intel and AMD, customers have been placing smaller, more frequent orders than normal in order to delay volume buys until they can get the best pricing."

However, for Intel it's bad news because "additional weight is being added to its already bloated stockpiles". Farrell believes that the surplus will start to clear in the third quarter but "linger on" into 2007.

But while Intel may have a glut, others have a famine. Some power MOSFETS went on allocation in May, and there's a shortage of standard logic and analogue supplies of certain types. µ

L'INQ
iSuppli