Intel upped the ante in an escalating war for processor performance with
750-MHz and 800-MHz versions of the Pentium III today, although many note
that the torrid rate of change in the chip world is making cutting-edge
parts tougher than ever to find.
As previously reported, the
launch is a way to counter the success rival AMD has had with the Athlon, a
Pentium III competitor that has received rave reviews. AMD released a 750-MHz version of the
chip late last month. Although AMD had supply crunches of its own earlier
this year, Athlon processors are becoming much easier to find, according to
AMD, however, will be coming out with an 800-MHz Athlon in January,
according to a number of sources, and has been showing off computers with
prototypes of a 900-MHz version.
Today's announcement, however, is symbolic to a certain extent and
reflects the pressure Intel is experiencing in its core market. Few of the
new chips, originally scheduled for the first quarter of 2000, have been
shipped to PC makers, sources said, meaning consumers won't see many
computers using them until next year.
In a statement, Intel said the new processors would not ship in volume until
the first quarter. The 800-MHz version will cost $851 in 1,000-unit
quantities and the 750-MHz Coppermine will go for $803.
Historically, Intel waited until it was producing fairly substantial volumes
of its new, faster chips before taking them public. The emphasis for both
companies apparently has shifted to getting the faster chips out at a more
"They are definitely in a reactive mode to AMD. None of this stuff has been
planned ahead," said Linley Gwennap, publisher of the Microprocessor
Report. "AMD has Intel sweating."
The emphasis on getting faster chips out more quickly will benefit
performance fanatics, commented Nathan Brookwood, an analyst at Insight 64.
If Intel accelerates the release of the 800-MHz chip, this will likely lead
to quicker releases of faster Athlons and even 1-GHz processors earlier than
"What we're likely to see is Intel taking the lead, and then AMD taking it
back," he said. An accelerated schedule would also mean the company is
having greater-than-expected success with the 0.18-micron manufacturing
process, a more refined manufacturing process that allows Intel to use
smaller wires and transistors.
Benchmark test results bear this out. Tests posted today on both The Meter and SharkyExtreme show that the 800-MHz
Pentium III has a slight edge over the 750-MHz Athlon. However, the 750-MHz
Athlon retains an edge over an equally fast Pentium III, according to the test results.
Performance processors typically have come out in small volumes that grow
over time--but that trend appears to be changing. Analysts and some computer
makers continue to note that there are still limited supplies of the 733-MHz
Coppermine Pentium IIIs, which were announced in October. Coppermine
was the code name for the new generation of Pentium IIIs that came out that
month. Coppermines differ from the standard Pentium III because, among other
reasons, they are made in the 0.18-micron process.
"Intel wants to go into the next millennium with the fastest PC processor,"
said Ashok Kumar, an analyst at US Bancorp Piper Jaffray. Regarding
availability, he said, "1.5 million Coppermine processors will be shipped
this quarter. Clearly there is a supply constraint."
There are also continuing supply problems with the components. One is
motherboards, which are necessary to couple the latest Pentium III chips
with Rambus memory, a vital ingredient for wringing out the full performance
potential of the latest Pentium IIIs, sources said.
"The 700-MHz [Pentium IIIs] are getting easier and easier to get. The 733s
are impossible to find," said one executive at a small computer maker, who
added that Intel's Rambus-centric motherboards are extremely difficult to
find. "Nothing has come out with Rambus on it."
An analyst note issued today by Richard Gardner of Salomon Smith Barney
reiterated the point. PC manufacturers face a slight risk for
lower-than-expected revenues this quarter "due to Intel microprocessor
supply constraints," he wrote.
Gateway is one victim of Intel supply shortages and the ongoing battle
between AMD and Intel. Merrill Lynch analyst Steve Fortuna said on Friday,
Intel processor shortages had disproportionately affected Gateway, and he lowered
fourth-quarter sales estimates by $117 million. Gateway only recently moved to all Intel processors,
having previously offered AMD processors on many consumer systems.
While a speedy release can give a company bragging rights, the associated
low volumes can backfire on manufacturers as well, because customers get
weary of not being able to get the glorious product they have read about,
said Peter Glaskowsky, an analyst at MicroDesign Resources.
Apple in the past has run into this problem, he said. Historically, Intel
has enjoyed a reputation for being able to produce steady volumes, he added.
How the product road map for Intel and AMD will change in the future is
uncertain, but most likely the chips will come out faster than expected.
Willamette, the code name for the chip that will succeed the Pentium III, is
due toward the end of 2000. Intel has said it will run at 1 GHz (1,000 MHz)
and faster. An acceleration of the road map, however, may mean that Intel
churns out a 1-GHz Pentium III in 2000 and releases Willamette at a faster
speed, said Brookwood.
For its part, AMD is slated to come out with an 800-MHz Athlon in the first
part of 2000 and hit 1 GHz by the second half. The company also will
bifurcate the Athlon line so that it can fit into inexpensive PCs and
Pure chip speed aside, the overall performance of both chips is affected by
other factors. The Athlon, for example, comes with a 200-MHz system bus,
which will get faster. The Pentium III currently uses a slower 133-MHz or
100-MHz system bus.
By contrast, the Pentium III can currently be paired with faster Rambus
memory when available or 133-MHz computer memory, or SDRAM. Athlon right
now is only used with slower 100-MHz SDRAM.