Intel is having trouble keeping up with demand for its Pentium 4 processor, leaving some customers and retailers short of the chips as they get ready for the end of year holiday sales season.

"At this time demand is stronger than our supplies," said Hisashi Nagai, a spokesperson for Intel KK, the company's Japanese subsidiary. Nagai said a strong jump in demand from October that surpassed the company's estimates came as a surprise and left factories unable to fulfill orders.

The Pentium 4 demand has been very strong. The 478-pin version are the most scarce. OEMs (Original Equipment Manufacturers) like Dell have also been affected by the shortage. Dell stopped offering the 2GHz PC for a short while when supplies were lacking.

But there is some good news. The shortage means that PC sales are growing, and this is excellent for the depressed economy. Sales have been better then expected. The introduction of Windows XP, and the aggressive pricing, has helped stores sell more.

Intel expects supply's should be back to normal by the end of the year, as factories catch up with demand.