Gateway to use AMD because of Intel chip famine

Issues profit warning for Q4, blames Intel drought

Gateway has come clean on its plans to use AMD microprocessors in its PCs, after issuing a profits warning yesterday blaming shortages of Intel components. The company said that it expects to post earnings for its fourth financial quarter that are less than expected, because of difficulties getting hold of enough Intel processors to satisfy demand. Those parts include 400MHz and 433MHz Celerons, as well as Coppermine .18 micron processors, some of which, as we reported the day after they were launched, were almost impossible to obtain. There was also a shortage of the popular BX chipset in autumn last year. In a conference call to financial analysts, Gateway said that uncertainty over the Y2K bug would also dent its profits for the quarter. Gateway executives said that the firm will introduce PCs using AMD chips within the next week or so. AMD in the US confirmed that it had been talking to the company about supplying it with microprocessors. The decision for Gateway to second source AMD microprocessors will be a blow for Intel, which persuaded the company last year to stick with its chips and included a financial incentive to help it do so. However, as we reported late last year, Intel, for a reason so far unexplained, unilaterally decided to end this arrangement with Gateway. Gateway is unlikely to be the only company to have been affected by the Intel chip drought, and we can expect to see other PC vendors reporting similar effects in the usually lucrative selling period between September and Christmas. While Intel announced a large number of Coppermine parts on October 25th, but even two months later, on Christmas Day, supplies of its top end 733MHz Pentium III were still severely constrained. ® See also Compaq favours AMD K6-II for new notebook range Gateway stealth launches Athlon PCs Intel loses big industry face to AMD over Coppermines Intel trashes Gateway rebate scheme No Athlon from Gateway -- officially. Yes there is, unofficially AMD wins must shiver Intel's timbers Compaq, Fujitsu-Siemens switch to AMD Athlons for Yule machines Big PC vendors furious over Intel Coppermine yields Huge shortages, technical problems hit Intel Coppermine debut