Intel makes chipset capacity agreement with ATI

Intel's senior vice president Anand Chandrasekher says the termination of the supply of entry-level chipsets cut Intel's profit and market share goals. He added that with capacity support from ATI, the shortage that occurred at the end of last year won't happen again.

Intel has reached a chipset supply agreement with ATI, said Chandrasekher, who belives that the chip maker’s shipment schedule could be more flexible due to better capacity allocations in the future.

Intel strategically discontinued its entry-level chipset offerings in the latter half of 2005 and the tight supply has still not completely eased since Intel decided to resume production of the chipsets earlier this year, sources indicated. The sudden shortage of Intel’s 845/865 and 915 chipsets benefited ATI, Silicon Integrated Systems (SiS) and VIA Technologies, who inevitably raised shipments of equivalent chipset offerings for both Intel and AMD platforms, the sources suggested.

The shortage of Intel's entry-level chipsets boosted AMD's marketshare as more equivalent chipsets for AMD processors were produced by third party suppliers. The resumption of the 865 chipset production will be the first step from Intel to disrupt AMD's share growth. More details over at DigiTimes.