When the news of the Intel chip shortage came, it seemed like great news for AMD and fans of AMD. Now there is news that AMD is going to have problems with its graphics chipsets, for perhaps the remainder of the calendar year.

This really hurts their chances of making up ground on Intel, and questions are certainly arising as to the ability of AMD to turn a profit again, simply because it cannot keep the channel full. Global Foundries just can’t do it, and so partner TSMC is getting more orders. That won’t be enough we are told, so not only is this bad for AMD, it is bad for anyone wanting an AMD video card. This is a terrible time to run into supply problems, with the promise of Eyefinity just now being shown.

[Maximum PC]

Much ado has been made over the chip shortage that apparently affected Nvidia’s Fermi architecture, but they’re not the only ones dealing with a tight supply. According to DigiTimes, supply for AMD chipsets is also running tight. So much so, that AMD is letting foundry partner Taiwan Semiconductor Manufacturing Company (TSMC) tap into its 55nm capacity reserved for chipsets to help ease current GPU shortages.

You probably noticed that AMD’s high-end HD 5870 and HD 5970 videocards were pretty tough to come by in the second half of 2009, which DigiTimes says was the result of low yields on TSMC’s 40nm process. As a result, graphics card partners placed more orders for 55nm Radeon HD 4000 series parts than they otherwise would have.

TSMC’s recent 40nm yields have been improving at a steady clip, which should help ease the tight supply of both 40nm and 55nm parts, but part of this is being offset by high demand, DigiTimes says. As it stands, AMD’s chipset shortage will likely last throughout the third quarter, and possibly into the fourth.

While some might think this helps retailers, as they are able to command higher prices for the AMD best models, in reality, no one wins, as they are not able to really clean up as they would if the availability were there and the prospective customers could all be served.

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An atheist is a man who has no invisible means of support.John Buchan

Undoubtedly, this is why the Radeon 4770, instead of dropping in price as it was eclipsed by newer, faster models, did not drop in price, and is still found at places like Newegg for slightly over $100.

The natural flow of price drops as things are replaced by newer items will continue to be skewed until the demand is met by the supply.

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