Intel Recalls Sandy Bridge Support Chips

Roger Kay, an analyst with Endpoint Technology Associates, said that the issue should be a short-term one for Intel, impacting primarily its bottom line and its competition with AMD.

“It’s a very technical thing that has a very direct financial effect,” Kay said in an interview with eWEEK.

However, that financial impact could be lessened by other factors. During the conference call, the Intel executives also talked about the company closing its acquisition of Infineon’s wireless business — which also was announced on 31 January — and the expected close of its $7.68 billion (£4.76bn) deal to buy security software maker McAfee, also in the first quarter. With those acquisitions in pocket — and despite the costs associated with the chipset problem — Intel officials said they expect first-quarter revenue to come in at about $11.7 billion (£7.25bn), up from an expected $11.5 billion (£7.13bn). In addition, sales for all of 2011 are expected to grow in the mid- to high teens, up from a previous estimate of 10 percent.

Kay argued that while some may look at the design flaw as a problem Intel execution, the company’s quick response in finding the problem, developing a fix and stopping shipments shows a strong level of execution. In addition, Kay didn’t expect the design flaw itself or any road map delays to effect Intel greatly. The design problem impacted only the four 3 Gb/sec SATA ports in the chipsets, and not the two 6 Gb/sec ports that are most often used by consumers, he said.

Sandy Bridge to take off this year

In addition, echoing what Intel executives said on the call, Kay pointed out that the company expects sales of Sandy Bridge-based PCs to take off later in the year, when consumers are buying back-to-school  items, by which time Intel will be producing at full speed.

“This is not the juiciest time of year, so being late to the market [now] is not so bad,” he said.

It does give AMD a boost, however. The company at the 2011 Consumer Electronics Show introduced the first of its long-awaited Fusion APUs (accelerated processing units), which combined high-end, discrete-level graphics on to the same piece of silicon as the CPU. It was at the same show that Intel rolled out the first of its second-generation Core-i chips, which also integrated the GPU (graphics processing unit) and CPU on the same die.

“The effect of [Intel’s chipset problem] is short-term, but in this race for SoCs, it helps AMD,” Kay said. “Fusion is already out there. … Its effects its momentum in the close race with AMD.”