Intel shuns three low-end chipsets

Intel will phase out production of three low-end chipsets for desktop PCs in favour of selling its higher-end and Centrino-based products, CNET News.com has learned.

The move, expected to take place by the end of August, could delay shipments of low-end PCs from various manufacturers for a couple of months.

Sources close to the chipmaking giant's dealings confirmed reports that Intel would shutter production of its 910GL, 915GL and 915PL chipsets. The three microcontrollers that help feed the main brain of Pentium 4 and Celeron D chips were expected to make up about 20 per cent of Intel's desktop chipset supply in the second half of this year.

An Intel representative dismissed reports suggesting the company was exiting the low-end chipset business altogether but said the company was in the middle of making changes to its manufacturing plants to make way for more mobile-focused and high-performance products. Despite reports about products that would be phased out, Intel declined to officially state which chipsets would be put on the back burner.

An Intel representative said: "Our factories are now running at full capacity but we are experiencing changes and, temporarily, there will be shortages." He added the company is expecting a product refresh later this year on all of its marquee processors: Itanium, Pentium and Xeon.

Intel's shift toward higher-performance chipsets may indicate the company is ready to address next-generation chips with support for processors with multiple cores, new front-side bus architectures, new peripheral interfaces and a growing list of demands such as managing security and running multiple operating systems.

Rival chipset manufacturers such as Silicon Integrated Systems (SiS) and Via Technologies are primed to take advantage of Intel's production changes, according to a recent Morgan Stanley report.

Morgan Stanley analyst Ellen Tseng said in a newsletter to investors: "Between SiS and Via, they [Intel] prefer SiS chipsets for the Intel CPU platform given the better graphic quality."

However, Tseng noted that motherboard makers are also likely to increase orders based on Advanced Micro Devices giving Via a leg up on SiS. Via controls about 50 per cent of the AMD platform-based chipset market.

A Via representative said Intel's movements are welcome since Via expects continued strong growth in the entry-level desktop PC segment over the long term.

He said: "We are seeing very strong demand for our Pentium 4 IGP chipsets such as the Via P4M800 targeted at the entry-level desktop PC market. Intel's moves are of course one major reason for this but growing demand in emerging markets such as India and China is just as important a factor."

Intel's laser focus on mobile chipsets is well documented. More than half of the mobile processors shipped by Intel are based on its new notebook PC platform, formerly code-named Sonoma, even though it is only three months old, the company said during its earnings call last month.

Michael Singer writes for CNET News.com