The shortage of Microsoft's next generation gaming console the Xbox 360 during much of the holiday season was due to the delay in supply of memory chips for the device by German chipmaker Infineon Technologies, according to a report by Dean Takahashi in The Mercury News. The Xbox 360 had been sold out just after its release in November and shoppers were frustrated since they could not find it on the shelves for much of the holiday season.
Microsoft had intimated that there were certain supply problems with some component manufacturers, but had refused to elaborate on the nature of these components. Citing unnamed sources, the report said that Infineon has had trouble in keeping up with the huge demand for the popular console. The German company is one of the two companies that supply memory storage ships for the Xbox 360.
It is reported that the company was unable to come up with GDDR3 (graphics double data rate) memory chips on time. Peter Moore, the chief of Microsoft's gaming division had admitted to "component shortages" being responsible for the delay in shipping Xbox, but had not said anything specific, "We have more than 200 suppliers and I'm not going to point the finger at any one of them," he said.
However, Moore was confident of meeting the soaring demand as Redmond had inked a contract with manufacturer, Celestica last week. Xbox has more than 1,700 components and Redmond officials said that the shortage in supply was not due to a single component, but a number of them.
Analysts feel that the chip shortage could prove to be a problem for Redmond in the long run, "I was concerned even before they released the Xbox 360 that they wouldn't get enough supply. This was a very aggressive plan by Microsoft. To me, it was risky to go ahead. If there is a shortage of these chips, it could very well cause a shortage of the Xbox 360," said Nam Hyung Kim, an iSuppli analyst. Microsoft had delayed the launch of its product in Australia due to supply problems and was forced to postpone the launch date.
