Palm Springs, Calif.
Intel Corp. has notified customers that its StrongARM embedded processor and PCI-to-PCI bridge chips will be in limited supply for up to six months.
The StrongARM shortage is causing some smaller OEMs to tighten their belts, although at least one large customer is reporting no delays in its order fulfillment. While the capacity crunch is affecting two of Intel's product lines, customers are focusing their concern on the StrongARM, an embedded RISC chip that is relatively new to Intel's portfolio.
Demand for the SA-110 and SA-1100 embedded processors is so strong that Intel will remain capacity-constrained "most likely for three months and at maximum six months," said Len Wegner, marketing manager for Intel's StrongARM and Bridges Division.
Prices are not expected to rise, although lead times are stretching out, Wegner said. Intel has just completed notifying its customers.
"The capacity's the issue," Wegner said, adding that Intel is acquiring additional test equipment to speed the StrongARM off the manufacturing line and out the door.
When asked for reaction to the capacity shortfall, Ron Smith, vice president of Intel's Computing Enhancement Group, replied, "We're seeing high demand for the StrongARM and bridge products. We're incrementally adding capacity in some cases, but meeting our customers' needs."
Still, at least one smaller OEM says the capacity issue is leaving it without adequate supply. Ennovate Networks Inc., a Boxborough, Mass., startup that is relying on the StrongARM to drive its first product, an IP switch, said it has stopped receiving shipments of the Intel chip altogether, according to a source within the company.
Intel said any break in supply could stem from the fact that when it first discovered the capacity issue, it temporarily halted orders to some customers until the full scope of the shortage could be assessed. "Our knee-jerk reaction was to stop everything," Wegner said.
Elsewhere, Kevin Havre, technical marketing manager for Hewlett-Packard Co.'s Asian-Pacific Computing Division, said that, to his knowledge, Intel has not curtailed its StrongARM supply. HP's handheld computer line is a major consumer of StrongARM chips.
"It's quite possible we're sucking up the available supply," Havre said.
Intel said the shortage resulted from an unexpected surge in fourth-quarter billings. To prevent future shortages, the company is asking customers to better forecast their demand, virtually the same request it makes of PC-microprocessor customers. Intel is still accepting new orders, according to Wegner.
In addition, Smith said Intel is tailoring a variation of its 0.18-micron process to embedded-logic products, which would increase the number of dice on each silicon wafer. However, Smith could not guarantee that Intel's embedded chips would receive the benefits as quickly as more mainstream processors.
Throughout the past year, Intel has promoted the StrongARM as an ideal microprocessor for communications, multimedia, and general-purpose embedded applications.
To date, however, the reach of the StrongARM has been somewhat limited. Tony Massimini, an analyst for Semico Research Corp., Phoenix, said Intel reported "miniscule" revenue from
the StrongARM through the end of 1998. Massimini said his preliminary estimate of StrongARM sales for all of last year is well below $100 million.
Analysts said the capacity constraints were unlikely to affect Intel's ability to win new designs, however, and the chip is seen as key to the company's future success in the embedded-RISC market. While Intel has sold millions of X86 microprocessors, none produce the mix of high performance and low power required by embedded-chip designers, according to observers.
"The StrongARM fills a hole in Intel's marketing strategy," Massimini said.
The StrongARM is manufactured at Intel's Fab 18, the Hudson, Mass., facility it acquired when it purchased the assets of Digital Equipment Corp.'s chip operations in May 1998. At the time of the acquisition, Massimini and other analysts said they believed the StrongARM to be the most important asset Intel purchased.
Because the StrongARM family is manufactured using Digital's proprietary fabrication process, the chips will remain essentially captive to the Hudson fab throughout their lifetime. The next-generation StrongARM, however, will be optimized for Intel's manufacturing equipment, Wegner said.