Intel Is Not In Trouble - Intel's 'Partners' Are
Now most of you might think "Phew! Bad luck for Intel! They've got quite a bit to worry about and it will cost them a lot of money. " Only few people will realize that those who suffer most from this issue right now are the poor companies that are between Intel and the end customer! Intel has huge resources and will easily recuperate from this issue, however the smaller companies involved are in serious trouble. Let me give you a perfect example.
We have found out which motherboard maker has sold the majority of MTH-chips. You might think that this was Intel, but while Intel delivered only 10% of the MTHs in their CC820-family motherboards, another board maker has produced and shipped far more than half of all MTH-motherboards. This highly respected, most successful and now rather doomed company is the Taiwanese motherboard maker Asus . Our informants state that the vast majority of their shipped i820-motherboards was the P3C-2000 or CUC2000 family, which comes with SDRAM support and thus with the faulty MTH chip. Now Asus is supposed to either reimburse their customers or supply them with MTH-less i820 boards and RDRAM. One of the results of Intel's homemade MTH-Caminogate2 is the drop of Asus' stock price by about 10% on May 10. But this is only the tip of the iceberg.
- Problem 1:
Asus can reimburse customers who want to return their i820 w/MTH motherboards and will get the money back from Intel later on. However, it isn't quite as easy to define the amount.
- Problem 2:
Many people bought their Asus-motherboard unknowingly with their system. You cannot quite expect that every owner of a computer system is able to take out his motherboard, bring it back and put in a new one. Thus those people need support. Either the OEM/system integrator is taking back the whole system and replaces it with a i820 w/RDRAM or somebody has to go to the customer and replace the board for him. This is costing HUGE amounts of money.
- Problem 3:
Asus sold only few i820 motherboards that did not come with MTH, because most of their customers did not want to pay the ridiculous premium for RDRAM. Thus the production of those boards is very low. Now exactly these boards are required as the replacement for the MTH-motherboards. If thousands of people are contacting Asus right now, which certainly is the case, then how is Asus supposed to have those hundred thousands of MTH-free i820 motherboards available for the replacement?
- Problem 4:
As you know from my initial article, the replacement includes an i820 board without MTH and the required RDRAM as well. Currently there is hardly enough RDRAM available to fill the demand for the replacements. Intel has assured Asus that it will supply the RDRAM for the replacement procedure, but right now Asus doesn't have several hundred thousand RDRAM RIMMs available.
You can see that it's not exactly a fancy thing to be in the shoes of Asus' CEO Jonney Shih right now. Rumor has it that he was in an emergency meeting with Intel all day on May 10, because Intel hadn't even informed him of this upcoming issue. Business may be tough, but it's not exactly Asus' fault that Intel is producing chips that don't work. Now Intel can lay back, uninformed, arrogant and obviously uninterested Intel-folks give concerned customers the wrong information and companies like Asus or any other company involved are suffering from Intel's mistakes.
I have already said it before, but it becomes clearer every day: Intel is not the reliable business partner it used to be anymore. Dealing with Intel today is like playing with fire. Asus had to learn this lesson the hard way. In some way one might think that it is the payback for not standing up for AMD when Asus covered up their own Athlon motherboard K7M in fall last year.