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Intel May Refocus Chipset Shipments for Higher-End Products Only.

Category: Chipsets

by Anton Shilov

[ 08/04/2005 | 09:01 AM ]

Intel may refocus its chipset strategy in order to sell more high-end and less entry-level core-logic components, according to numerous reports around the Internet. The company will reportedly go as far as to withdrawing from cost-effective chipsets market and allocate manufacturing capacities for more lucrative products.

The world’s largest chipmaker is gearing up to reduce or even cease shipments of core-logic sets for entry-level computers, report CNET News.com and DigiTimes web-sites. The sources mention Intel’s 865-series, 915PL, 915GL as well as 910GL chipsets as those which are to be phased out already in August. The decision was reportedly made very recently and Intel even has not notified all of its customers about the move.

The reasons behind the decision are unclear at this point. Perhaps, Intel intends to manufacture more high-margin products instead of low-margin chipsets that are technologically outdated in certain cases. Furthermore, Intel may need additional manufacturing capacities to gear up for high-volume product launches late this and early next year.

Intel did not confirm the reports, but said that it does plan certain changes with allocation of manufacturing capacities.

Intel’s full or partial withdrawal from entry-level chipsets market may help other chipsets designers, such as ATI Technologies, NVIDIA Corp., Silicon Integrate Systems Corp., ULI Electronics as well as VIA Technologies, to boost their revenues. However, it remains to be seen whether those makers are capable of delivering sufficient quantities of entry-level core-logic sets to the market.

In case third-party Intel-compatible chipsets designers do not have enough chips in stock, they will have to quickly allocate manufacturing capacities for production at contract semiconductor makers, such as TSMC and UMC. It is unknown whether those two companies have enough unused capacities for production of chipsets.

According to market research agency In-Stat, this year PC chipset market will reach $6.9 billion, whereas in 2009 it will reach $10.3 billion.