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Intel releases latest chips amid shortages

The chip giant releases its 850-MHz and 866-MHz Pentium III desktop processors, even though some PC makers report shortages of existing chips.

Intel today released new desktop processors, even though some PC makers report shortages of existing chips.

As previously reported, the Santa Clara, Calif.-based chipmaking giant announced 850-MHz and 866-MHz Pentium III processors, priced, respectively, at $765 and $776 in lots of one thousand.

The chips follow the recent, accelerated introduction of a Pentium III running at 1 GHz. Price cuts are not expected on the rest of the Pentium III processors as yet. Intel cut Pentium III prices at the end of February.

While computer enthusiasts typically welcome the introduction of new processors, the tight supply of the faster Pentium IIIs continues to be a source of irritation for manufacturers and dealers who incorporate Intel processors into their computers. Dealers have been particularly hard hit because the bulk of the fast chips have been going to large manufacturers like Dell.

The 800-MHz Pentium III, which was announced in December, remains relatively difficult to find, according to dealers. The 1-GHz Pentium III is also fairly elusive. Intel announced the chip on March 8. Dell, often the company that gets new Intel parts to market first, shipped its first 1-GHz computers last week, according to a spokesman. But the wait time, as quoted by a Dell salesperson this morning, averages 28 days for 1-GHz systems.

Considering the current situation, finding the new chips will not likely be an easy task. Still, supplies have improved for Pentium IIIs running at 750 MHz and below.

Several high-level Intel executives predicted in February that the supply situation would stabilize by the end of the quarter, which concludes in two weeks. Some dealers, however, said distributors and brokers have informed them that the shortage could continue.

The shortage arises from delays last year in the release of the latest Pentium IIIs and an acceleration of the product road map. Last October, Intel released the "Coppermine" generation of Pentium IIIs before historically normal inventories of the chip existed, said Intel and several analysts. A shortage became apparent almost immediately.

Simultaneously, rival Advanced Micro Devices was finding increasing commercial success with its Athlon processor. The two companies soon began a speed race. Both Intel and AMD, for instance, originally planned to release their 1-GHz chips toward the middle of the year. Intel moved up the release to March. AMD followed suit, releasing its chip two days before Intel.

In addition, some PC executives and analysts have stated that the typical first quarter seasonal slowdown wasn't as bad as usual.