The UK channel is bracing itself for a tranche of remarkedslaught of fraudulent stock. microprocessors to be unleashed by unscrupulous brokers, forcing manufacturers to issue warnings to distributors not to handle counterfeit chips.
Some chip brokers are taking advantage of the scarcity or high price points of certain processors by injecting masses of 233MHz Intel Pentium II and 166MHz AMD MMX chips into the channel that are being rebadged and sold as 266MHz PII and 200MMX chips respectively.
The situation has led AMD to issue letters to its UK and Northern European distributors, warning them to ensure that there is '100 per cent certainty and security' in the product that distributors sell. The letter was issued, according to AMD European market analyst Rana Mainee, after one K6 chip was discovered with its original part number and batch code removed and remarked.
The letter quoted clause 3, section A, paragraph B of the AMD distribution contract 'that all the distributors' purchases of AMD product should be from AMD'.
However, Mainee said: 'We do not blame anyone. We are trying to protect them.'
AMD 166 MMX chips are vulnerable to remarking because of the short supply of 200 MMX chips linked to the vendor's inability to produce to capacity.
AMD has since struck a deal with IBM to outsource some chip production to meet demand.
But one distributor suggested the problem stemmed from the over-distribution of chips. He added that the 200 MMX was vulnerable to remarking because it would now hit buyer's price points.
One reseller claimed that it had been in a meeting with IBM Microelectronics sole UK agent, Blue Micro, in which the agent expressed its concern over the impending influx of remarked chips and felt the need to warn its channel.
A representative at Intel said it understood that there was a problem of remarking but had no idea to what extent. 'We are working with law enforcement agencies to stamp it out. People will try to make a fast buck against us and OEMs,' he said.
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