The demonstration, made during a keynote address by chairman Andy Grove and senior vice president Albert Yu here at the company's developers' forum, came as part of a showcase of Intel technology coming this year.
Although consumers won't see chips running this fast on shelves for a while, Intel will release Pentium IIIs running at 1 GHz or faster by the second half of the year as well as the next-generation Willamette chips running at the same speed, Yu said.
"We will enter volume production (on the 1-GHz Pentium III chips) in the third quarter this year for performance desktops and low-end servers," Yu said, holding up one of the versions of Willamette to the audience. Yu also showed coming computers from IBM, Hewlett-Packard and Dell Computer that will contain 1-GHz Pentium IIIs.
Willamette will come out more gradually. Hundreds of thousands of the chips will come out this year, with millions to follow in 2001.
Intel and Advanced Micro Devices have been engaged in a game of one-upmanship in terms of speed since last summer, when AMD released its touted Athlon processor. Both companies have advanced their product road maps so that AMD is now selling an 850-MHz Athlon and Intel is selling 800-MHz chips earlier than planned.
The competition has extended to technology demonstrations. Earlier this month, on a day when Intel was discussing its 1-GHz chips at a semiconductor design convention, AMD demonstrated an Athlon running at 1.1 GHz.
The Willamette chip barely hit the 1.5-GHz barrier today. The chip went to 1.499 GHz, and then dropped to 1.492 GHz before popping to 1.5 GHz.
While speeds are becoming faster, both companies--but particularly Intel--have had trouble meeting demand for these faster chips because they are being released before historically normal inventories exist. Demand has also been slightly higher than expected in the first quarter, said Paul Otellini, general manager of the Intel Architecture Business Group.
Intel is trying to catch up with chip demand by expanding production.
"We have five factories going full blast. Demand has far exceeded expectations," Otellini said. "By the second half (of the year), we are going to have six factories."
Yu also laid out the product plan for the year. In the first half, Pentium IIIs and Xeons will hit 900 MHz or more, with 1-GHz- plus coming in the second half. Celeron chips will hit 600 MHz in the first half and go to 700 MHz or faster in the second half.
The second half will also see the introduction of Timna, a Celeron with an integrated graphics chip and memory controller. Although originally rumored to be compatible with next-generation Rambus memory, the chip will at first work with ordinary, less-expensive memory. The Rambus move will occur in 2001, said Pat Gelsinger, an Intel vice president.
Grove, for his part, reiterated his belief that building the Internet infrastructure will drive the industry. Server demand will explode in the next few years as more companies move to e-commerce. Consequently, hosting and services will also expand.
Business-to-business e-commerce now only amounts to $400 billion annually. In four years, it will hit $7 trillion, which still will only be a portion of the $100 trillion in overall business commerce, he said.
"We are going to follow the bits and put devices everywhere," he said.
Eventually, three types of applications will dominate the Internet, he said: information applications for finding or aggregating information; transactional applications, for consumer purchases; and market applications for business-to-business commerce.
With all of the construction that needs to take place, Intel and others will need to concentrate on keeping costs down. Interestingly, two of three e-commerce CEOs brought on stage to tout the benefits of e-commerce and Intel servers said they were using the low-cost Linux OS.
"All of this is predicated on us collectively to do the same thing that we did in the IT industry," Grove said, adding that there will be a "relentless drive to higher performance at lower prices."