HP finally confesses that it’s choked with chips

The stories on this subject just don't stop coming.  Now it seems that the bean-counters in HP Grenoble have finally woken up and realised what the rest of the world has known for a long time. There are far too many chips and too many chips makes for a poor diet. KitGuru investigates the coughing and spluttering.

As KitGuru reported earlier, the choke has been known by Intel for quite some time – and yet it seems to have accelerated production of chips.

But Intel's financials have been based on sales, rather than just printing more Core i3/5/7 processors.

Meaning?

Someone has to have been buying them.

Back in June, Acer came clean and publicly admitted that that has made so many unwanted computers that it could almost give one to every child in London – free of charge and presumably without the need for a riot (come on Boris – you know it makes sense!).

But surely that's not enough?  Acer followed up the ‘channel choke confession' with the embarrassment of slipping 2 places in the global PC rankings, so it's clear that they are not big enough, alone, to have encouraged Intel to carry on the chip churning process.

Overproduction of that magnitude needs help from HP.

It's strange that none of the major channel magazines seem to have covered this one yet. We can all see the huge number stores that are offering back-door HP kit at low-low prices. Searching for HP Overstock on Google will get you over 1 million results.

We have now spoken with HP suppliers who have confirmed that truck load of components have been turned away by HP's factories.

So what will happen next? One thing is for sure, Intel will not want the old chips back. No sir. The world's biggest CPU producer has clear plans to delivery X79 in the very near future and then transition the globe to the power of Ivy Bridge in Q1 2012. Intel itself has reported that 5 complete FABs have been re-tooled for the Ivy bridge revolution. For that revolution to happen, the channel needs to be clear and its customers hungry.

How many chips do Acer, HP etc have on their collective plates?  That will be a key question.

KitGuru says: Since writing the initial story, we have made more contact with sources close to Intel, HP and Acer. We are working on some info right now and hope to be able to clarify the magnitude of the channel choke position shortly. We're expecting a price war on a scale not seen for some time. Consumers can expect MEGA bargains through Xmas.

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