November 17, 1999 Web posted at: 11:24 a.m. EST (1624 GMT) by James Niccolai

From...

(IDG) -- Intel is scrambling to catch up with demand for its fastest Pentium III processors but currently is unable to meet orders from its PC manufacturing customers, a senior Intel executive confirmed Monday.

"There have been a confluence of factors that have put a huge amount of pressure on the overall supply chain, and we're scrambling" to keep up with demand, Pat Gelsinger, vice president and general manager of Intel's desktop products group, said in an interview Monday.

The shortages affect Intel's fastest mobile and desktop Pentium III processors, which were released late last month and are being manufactured using a new, 0.18-micron process, an Intel spokesman said. Intel's fastest desktop Pentium III processor runs at 733MHz, while its highest-performance mobile chip runs at 500MHz.

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The impact of the shortage on consumers wasn't immediately apparent Monday. But a high-level official with one of Intel's PC manufacturing customers said in an interview Monday that his company is chomping at the bit for the new mobile Pentium IIIs for corporate notebook computers.

"We have some exciting mobile products that we just introduced recently ... and the only thing holding those products back from flying out the door is the availability of processors," said the official, who asked not to be identified.

Gelsinger played down the significance of the shortage. Intel always faces "exciting issues" when it switches to a new manufacturing process, and the problems it is experiencing with the Pentium IIIs are not "atypical," Gelsinger said.

"We need more maturity with the [0.18-micron] process," he admitted.

The executive wouldn't be drawn on whether Intel is having technical difficulties producing the chips, but said unexpectedly high demand as well as disruptions caused by the recent earthquakes in Taiwan contributed to the difficulties.

"Everybody wants more," Gelsinger said. "We are meeting all of our backlog commitments to customers; we can't satisfy all of their upside requests."