Addressing a major pain point for hardware resellers head-on, Intel Corp. Director of U.S. Partner Sales Programs Todd Garrigues opened a keynote address at today’s D&H West Coast Technology Show in City of Industry, Calif., by discussing what he called the “elephant in the room”—the chip maker’s ongoing processor supply deficit.
Attendees at the annual conference, he noted, had been telling Intel representatives all day that their inability to fill PC orders due to persistent CPU shortages was painfully impacting revenues and customer relationships.
“We’re not blind to that, we do care about that, we’re sensitive to that, and we’re working very, very hard to get you product,” Garrigues said.
More specifically, he added, Intel spent billions of dollars in the latter half of 2018 on a crash effort to increase production capacity. Those efforts should begin bearing fruit in the third quarter of the year, Garrigues continued, echoing guidance provided elsewhere by company executives.
“Sand to silicon is about six months, give or take,” he said. “We think we’re getting very close to seeing … those supply lines alleviated from some of the tightness that you feel today.”
The wait could be longer, however, for products in Intel’s “value segment,” including its Celeron, Pentium, and Core i3 lines. “Those lead times look likely to be more towards the fall in terms of when we really see that supply,” Garrigues stated.
That could be too late for Trinity3 Technology, a solution provider in St. Paul, Minn. that sells almost exclusively to K-12 customers. “Our largest-selling products are those entry-level products,” notes Jesse Tupy, the company’s director of purchasing, adding that the K-12 buying season is all but over by fall.
“I don’t know how many customers are going to be willing to wait,” he says. “They have a budget, they need to fulfill certain needs, and if they can’t get a product with an Intel chip, they’re probably going to go another route.”
Tupy doesn’t expect Intel’s supply issues to weaken Trinity3’s faith in Intel as a partner. “I would guess that being the company that they are and the leader in the market that they are that they won’t allow that to happen again, especially to the scale that it’s happening,” he says.
Even so, he won’t hesitate to sell hardware bearing processors from Intel rival AMD if the alternative is selling nothing at all. “At the end of the day we need to provide a solution for our customer, and if we have to do that with a different processor inside, then so be it, we’ll do that,” Tupy says.
What that ends up meaning beyond this year’s purchasing cycle is an open question, he continues. If the AMD-based PCs at least some of his clients will probably end up buying don’t perform well, AMD will get the blame whether its processors are responsible or not. If those devices do perform well, however, some school districts will likely be more open to buying further AMD systems in the future if it saves them money.