AMD admits processor shortages

Reports arose last month that, due in part to demand from Dell, AMD was unable to supply the distribution channel with enough chips. Dell later responded by saying it had a “bountiful” supply of chips from AMD, but the chipmaker itself never issued an official statement. The folks at Computer Reseller News have now finally squeezed a statement out of the company:

In a prepared statement for CRN, AMD acknowledged the shortage but declined to discuss its allocation guidelines or channel strategy. A spokesman attributed the problem to a strain on supply as overall demand increases from both system builders and top OEMs.

According to a Goldman Sachs analyst quoted by the same site, AMD’s Socket AM2 desktop processors are in tight supply because AMD switched some of its production capacity to mobile chips and allocated more processors to PC makers. The focus on notebook chip capacity makes sense considering Dell launched its first AMD-based notebook five days ago. Other companies are less than happy about AMD’s priorities, though, with some quoted as saying that AMD is effectively “divorcing” the channel. Thanks to The Inquirer for the tip.

Comments closed
    • Chaos-Storm
    • 14 years ago

    #16 Find me one with raid support. I’m actually looking into upgrading my system. I mean I’m willing to spend the 200 on a board, I’m just curious if there are cheaper ones available (has to be able to overclock)

    The difference in motherboards between AM2 and C2D is huge atm. Every $80 AM2 MB has raid, PCI-E, DDR2-800 support, many are even overclocking friendly, there are $120 dollar boards with SLI.

    • Palek
    • 14 years ago

    #9 and #17, Ed has in the past shown such a blind bias towards intel that I would not even ask him the time of day, fearing he would somehow put a spin on that. He may have changed since then, but based on past writings I have a hard time believing that any opinion pieces from overclockers.com could present a valid point of view. Same goes for amdzone.com at the other end of the spectrum. With that aside…

    This may sound like AMD biting, no, chewing off the hands that used to feed it, but it’s nothing more than the result of cold, hard business decisions from a corporate entity that has no soul (whether it should or not is an entirely different discussion). AMD obviously pushed for more customers than they could actually supply, and now they are going to lose some of them because manufacturing could not keep up with marketing/sales. A classic case of biting off more than they could chew. So they had to pick between bad and worse, and made the more logical and (hopefully for AMD) ultimately profitable choice of satisfying large customers first. Ho-hum, business as usual.

      • blastdoor
      • 14 years ago

      y[< #9 and #17, Ed has in the past shown such a blind bias towards intel that I would not even ask him the time of day, fearing he would somehow put a spin on that.<]y Ed's bias is that he is anti-AMD /[

        • Palek
        • 14 years ago

        and #25, sorry, I didn’t actually read the article, I have been avoiding overclockers.com for the last few years. I put them on my “blacklist” after reading a few articles that I found to be seriously lacking in objectivity at the time (please don’t ask for links, we are talking years back). Maybe I should give them another go, you two make reasonable arguments (and civilized too, thanks for that!) for their case.

      • flip-mode
      • 14 years ago

      No, Ed is about as impartial as they come. He just focuses on the negatives. He likes to contradict others. If everyone else paints a rosy picture, he talks about the undiscussed negatives. If someone else puts a bad spin on something, he’ll put a good spin on it. It’s just his method.

    • Chaos-Storm
    • 14 years ago

    Its not just the price of the CPU either. I could get an AM2 motherboard with raid and DDR2-800 support with PCI-E for like 80 dollars. To get an intel board with the same features I would have to pay like 170. An 80 dollar intel board that supports conroe will come with DDR400 support and AGP! Having said that, I will probably be upgrading to Conroe soon. I’m just saying that if you factor motherboard costs and don’t overclock, AMD probably beats intel in everything except a few game titles such as FAR CRY. If you overclock though, as I will be, it is really no contest, as nothing AMD has can compete with a 2.8-3.2 Ghz conroe. For many enthusiasts this is all they look at, but we have to remember that most people don’t overclock…

      • MadManOriginal
      • 14 years ago

      Try harder. There are a few C2D motherboards on the P965 chipset that are much closer to $100 than $200 and are good overclockers too.

    • SGT Lindy
    • 14 years ago

    Wow….just like most everyone thought. Once Dell went with AMD…..AMD would not be able to keep up. Steve Jobs is probably saying “I told you so”.

    Unfortunately for AMD it’s the cheap/low end CPU’s that are in high demand. The Core 2 is the CPU of choice once you get past the cheap stuff.

    AMD better hurry up before Intel ramps its Core 2 up to full speed and starts offering “Celeron” versions of the Core 2 stuff.

      • flip-mode
      • 14 years ago

      y[

        • Proesterchen
        • 14 years ago

        q[

          • flip-mode
          • 14 years ago

          I totally shocked to say this, but we have a difference of opinion 😉 Perhaps buying a retail CPU from Newegg or similar, you’re correct. But it’s my understanding that OEMs are offering very competitive prices on the AMD boxen. Not that I’ve looked though.

          Personally, I’ll have no OEM shite on my desk, and I will overclock, so if I were buying, C2D would be hard to resist.

          • wierdo
          • 14 years ago

          §[<http://www.computeractive.co.uk/personal-computer-world/news/2168026/amd-attacks-integrated-market<]§ Nuff said. cheaper and overall better, even if the CPU part of the equation is faster.

        • SGT Lindy
        • 14 years ago

        I would consider any CPU up to $100….the cheap stuff. From $100 to $400 medium range….$400 to $800 high end…anything over $800 Extreme.

        If I was spending anything over $180 on a new CPU…it would be Intel. I would take a E6300 over any AMD chip just for power consumption alone. With lower power consumption I will get a quieter box.

        I dont overclock………I dont see the point unless you have a PC just to benchmark…in every day usuage you wont notice it. That said if I was a benchmarker/overclocker I would still get the E6300 for its headroom.

    • flip-mode
    • 14 years ago

    An overclockers.com write-up is dead on regarding this one:
    §[<http://www.overclockers.com/tips01058<]§ This is business. AMD would have been stupid to pass up a deal with Dell, and they'd be stupid again to screw up the deal after it's done to satisfy a much less predictable channel. This just reinforces some already know facts: 1. AMD needs to get its additional fab space up and running ASAP 2. AMD needs to get 65-nano going ASAP 3. Points 1 & 2 don't play nice together The good news is that AMD is selling every processor it can make. The bad news is that AMD isn't able to make enough processors. More good news is that the Dell deal is great news for consumers and Intels hegemony is further weakend.

      • poulpy
      • 14 years ago

      Yeah sounds good to me, they’re always increasing their production capacity and it’s still less than what the market is looking for.
      Looks like they’re growing at the right pace and not too quickly, I mean we’re talking about fabs here so you’d rather be carefull and not end up with a useless one..

      • blastdoor
      • 14 years ago

      Regarding the overclockers.com article, I think it is very likely (ie, far beyond “might”) that AMD will eventually be bought out, probably before 2010. As Ed points out, they have no money. And Core2 is going to ensure that they don’t get any serious money any time soon.

      The great equalizer that allowed AMD to mitigate Intel’s process advantage was the horrible train wreck that was Netburst. A 90 nm A64 more than held its own against a 65 nm Netburst. But with Core2, Intel may actually have the upper hand even on the same process. What happens when Intel switches to 45 nm next year? They’ll have the better process and the better design. Intel’s switch to 45nm is going to be hell for AMD — they’ll have a slower, more costly to produce product. They’ll do well to break even. And so where will the money for a 45nm fab conversion come from? The German government?

      The only question in my mind is not whether AMD will be bought out, but by whom? The top contendors that I can think of are Microsoft, IBM, and China.

        • MadManOriginal
        • 14 years ago

        Yeah, they are selling as many procesors as they can produce and are making so little money they will have to be bought out. Somehere in there the logic fails :p

          • blastdoor
          • 14 years ago

          Selling all they make is not enough — they have to be able to sell at a price that will allow them to afford the massive expenditure needed to convert to 45 nm.

          If you cannot understand that logic, then I hope that you don’t try to invest money on your own.

            • Xylker
            • 14 years ago

            In defense of his logic, AMD has seen markedly higher ASPs since the days when Thoroughbred A/B cores were $100 at the high end and last I checked their gross margin REMAINS above 50%.

            While I do not doubt that there will be pricing pressures from Core2, we also know that the Intel crossover to only Core2 production has not yet crossed 50%. As enthusiasts, we are ahead of the curve and can recognize that there will be a pretty good Christmas in store for Intel, I just don’t think it will be this one…

            Who knows, AMD may also make K8L the Grinch that stole next Christmas!

            Time will tell.

    • Tarx
    • 14 years ago

    Seems like it is some CPUs that are in short supply rather than their whole inventory.
    But I just did a quick check at NCIX online store and saw in stock (e.g. over 50 in stock of X2-4200+ AM2) just about all the X2s (for both S939 and AM2).
    §[<http://www.ncix.com/products/index.php?majorcatid=101&minorcatid=106<]§

    • shank15217
    • 14 years ago

    even if dell is a big customer, amd better get it’s supply chain straightened out. This is not good. Its hopefully going to get better once the 65 nm process is up and running.

      • moose17145
      • 14 years ago

      In a way it’s almost good for AMD the Core 2 came out, imagine how bad it would be if everyone were still clamoring to get Athlon 64’s while Dell is trying to suck them all away!

        • Proesterchen
        • 14 years ago

        Yeah, I’m sure the AMD guys would be crying their eyes out selling whatever they can make for a couple of times the price.

          • d2brothe
          • 14 years ago

          Tru dat, I’m surprised they haven’t raised prices some, or at least rethought they’re price breaks (although too late for that now)…if they truely are struggling, they could increase revenue that way. Generally a limited supply causes price to go up…

            • pdjblum
            • 14 years ago

            If they raised their prices sales would go down and so would revenues. Core 2 Duo is already a better value. Dell is using amd chips in value machines it seems, and Dell is not going to be willing to pay more for the chips; and why would anyone else.

            • d2brothe
            • 14 years ago

            But the point is sales are already too high, they cannot meet the demand, thus demand is not limiting they’re sales, they can afford to decrease demand by increasing prices.

    • flybywire
    • 14 years ago

    This doesn’t come as a big surprise, after all, Dell is one hungry pig!

    • Krogoth
    • 14 years ago

    Duh! Captain Obivious to the rescue!

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