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Intel goes after graphics chips

The chip titan unveils the Intel740 graphics processor and enters its last major chip market.

Intel(INTC)'s foray into the last, great PC chip market has begun. Intel has officially christened its graphics chip as it prepares to enter this market and shake up the graphics chip world.

Intel today unveiled--very quietly and unofficially--the Intel740 graphics processor, slated to find its way into PCs that will use Intel's Pentium II processor upcoming in the second half of this year.

The company also announced, in a related development, a broad industry initiative to develop next-generation visual computing technologies based on its 3D Accelerated Graphics Port (AGP) architecture. Furthermore, the company announced that it has officially formed a workstation division.

With the disclosure of its graphics chip, it is clear now that Intel will be making all the major chips used in a PC. Intel already makes the processor, the brains of the PC, and the chip set, which could be described as the rest of the PC's central nervous system. Now it will make the processors that draw the 3D graphics, the last major chip market for Intel to enter.

Intel, which is an investor in CNET: The Computer Network, will now compete with the likes of Cirrus Logic, S3, and ATI, major graphics chip manufacturers which, ironically, also announced support for Intel's AGP 3D graphics technology here today. AGP is Intel's next-generation 3D graphics technology and is expected to appear in PCs in the second half of the year.

"We do this all the time," said Eric Mentzer, a director of marketing at Intel, referring to the fact that Intel will both compete and collaborate with graphics chip companies. In the past, Intel has also simultaneously collaborated and competed with chipset companies.

"It's clear they're going to be a force [in the graphics chip business] but you also have to remember that making graphics chips is very dynamic and complex. They face some big challenges," said Mike Feibus, an analyst at Scottsdale, Arizona-based Mercury Research.

The Intel740 graphics chip was developed jointly with Lockheed; it is expected to find its way on to Intel motherboards and PC add-in cards, said Mentzer.

The chip will be based on 2X AGP technology. This is the "double-speed" 3D graphics technology that is expected to prevail in high end 3D-capable PCs in the second half of the year. These systems will use Pentium II processors.

Intel also disclosed today that it will develop a 4X AGP technology for high-end workstations that can transfer data at 1 GB/sec. The 2X technology operates at 512 MB/sec.