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Posted: Thursday, August 13, 1998 12:00 am | Updated: 8:52 am, Fri Apr 25, 2014.

processor shortage

Bloomberg News

SANTA CLARA, Calif. -- Intel Corp. doesn't have enough of some of its more affordable processors, causing a shortage of cheap personal computers for corporate users.

Computer dealers and distributors are reporting scant supply of PCs with 266 megahertz and 300MHz Pentium II chips, blaming Intel's push toward faster and more profitable 333MHz, 350MHz and 400MHz processors. Hewlett-Packard Co. and International Business Machines Corp. have the fewest of the cheap PCs in inventory, the dealers said.

Intel is pushing top-of-the line processors that cost more to help stem a decline in its earnings. The move comes as demand from corporate buyers for less-expensive PCs built with cheaper chips is picking up.

``It's pathetic. Corporate customers don't move as fast as Intel,'' said Eric Walton, vice president of product management at Entex Information Services Inc., in Rye Brook, N.Y. Entex, which sells PCs to large corporate customers, has a larger-than-normal four-week backlog of orders.

``There are some spot shortages of Pentium IIs,'' said Intel spokesman Tom Waldrop. He said the shortages are temporary but declined to say which specific chips are in short supply. ``We are working on increasing processor production. We expect supply to be tight until late this quarter.''

The shortage isn't having as steep an impact on consumer PCs because manufacturers use chips from rival chipmakers as well as Intel's newly introduced Celeron processor, which doesn't have some of the extra memory and performance that corporate users want. Still, there may be some shortages for Pentium II machines at retail.

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