Many things can go wrong during the process of the creation of the chip. If only one transistor of the L2 is defect, the whole cache is worthless. Tiny dust-particles that get in the core can destroy the whole cache. Even in the already extremely clean chip-fabs there are still a lot of such particles. Also the delay of the Coppermine-core Pentium III was delayed because of trouble with the L2 and now this new Pentium IIIE is released we see that the higher speed models are very hard to get.
Yield turns out to be low.
This could be partly caused by on-die L2, which cannot handle the high speed. Of course chipmakers are always looking for improvement. The solution for the above problem was to include redundancy protection. The trick is to create extra rows and columns. If the chip is OK, those extra parts will be obsolete, but if some parts are defect, the extra spare rows and columns come in handy.