Intel shortage hits Australian builder partners

Five Intel partners confirm shortages in chassis, redundant power supplies and other server components

Australian system builder partners say they are feeling the pinch of a global shortage of server chassis and components from Intel.

Intel director of North American channels and distribution, Eric Thompson, was quoted in a media report as saying selected server components had been difficult to obtain through Intel authorised distributors.

Thompson said Intel was acting on the shortage by adding new vendors and expected to see a full recovery in early 2009.

Local system builders Protac, Leader Computers, ASI, TodayTech and Pentaq all told ARN they were experiencing a shortage of Intel components.

Leader Computers sales manager, Jamie Ianson said the company had been forced to find alternative supply options. Intel had provided a list of approved alternative chassis.

“They have been very reasonable as far as letting us know what they are happy to be used quality and thermal-wise,” Ianson said.

Leader has experienced difficulty locating chassis, hot swap bays and redundant power supplies.

“Redundant power supplies is the one that really hurts because Intel’s pricing is very reasonable and if you have to look at other brands they can be quite pricey,” he said.

“We’re managing with other options, you have to; you can’t stop selling servers because Intel can’t provide them.”

Ianson said Leader’s numbers hadn’t suffered because of the shortage – instead the company is taking longer to deliver.

“For anything different we have to look into the configuration every time,” he said. “That sort of thing is making things a little more annoying because we don’t know what stock we want to hold and how long it's going to go for – we don’t want to stock up massively and then find out they are available again.”

TodayTech CEO, Jack Zhong, said the shortage could affect his business’ revenue and customer satisfaction. His manager for distribution and operations, Phil Cribb, said chassis were particularly difficult to come by at the moment.

“We are experiencing a bit of a tight market on some of the components, specifically the chassis and hot swap drive bays are most affected,” Cribb said.

“We are working closely with Intel and do our best to meet the market demand and, unfortunately, it’s not always possible. These things happen from time to time and supply chains get affected by things outside of people’s control.”

ASI director, Maree Lowe, said the company is expecting difficulty locating Intel server components, but is not feeling immediate effects as it has enough advance stock.

“But in the middle of January it might get a bit tight for 5U and 2U chassis,” she said.

Protac marketing coordinator, Ben Tai, said the Intel component shortage coupled with the current economic climate is leading some customers to switch to cheaper AMD alternatives.

“Intel is still the market leader so most people are sticking with them, but for the moment during the economic crisis people are trying to save on budgets which is why some dealers switch to AMD CPUs, because it’s a little bit cheaper,” he said.

“We have tried to get [Intel] stock but unfortunately most distributors don’t have stock for some motors, like the E84 – we need that to build a system.”

Tai said he hoped the shortages would subside by year’s end, but expected the problem wouldn’t be resolved until early next year.

Pentaq CEO, Raj Sharma, was less forgiving, claiming there was no excuse for the “huge” supply shortages.

“When I was general manager of Tech Pacific in Hong Kong, I used to shoot my Intel product manager when we were out of stock,” he said.

“I think the vendors are all very nervous and the distributors aren’t stocking anything. The problem is under ordering. I think people had forecast a huge drop so nobody carried any stock. Unfortunately, stuff like chassis take a lot of resources, freight, and organising of order cycles of six months and people just said ‘oh in six months we probably won’t need it’.”

Sharma said the shortages hadn’t affected Pentaq, apart from having to push back “a couple of orders here and there”.

Intel told ARN it is working with partners to help them locate supply sources, and has provided system builders with lists of approved alternative suppliers.

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