Rather than ship out over a million Gen1 chips that will be sure losers if they aren't received by buyers in the next 2-4 weeks, why don't you offer Gen1 chip buyers the opportunity to upgrade to Gen2 chips at no extra charge?
Assuming Gen2 chips offer 4-5 times the performance and lower power consumption compared to Gen1 chips, this seems like a win/win situation for both Avalon and buyers.
Also, it sounds as if Gen2 chips will work with existing designs with little to no modification necessary.
Of course, this is also contingent on you being able to deliver Gen2 chips in October.
I understand that. This is from the last Avalon update:
"We will take this time to fulfill a promise to announce the next generation chip 2 month ahead of schedule so potential buyers can make a decision. Soon we will be disabling the pre-order of Avalon Gen1 chips and only sell the remaining stock as we phase out old technology for a new 55nm, which goes on sale for immediate delivery at mid October 2013. This 55nm will retain the same physical dimension as the 110nm Gen1, only few pads were changed so getting them up and running requires very little change to existing design."