Intel releases 933-MHz chips as shortage eases

Intel today released a 933-MHz Pentium III for desktops, amid signs that the shortage of processors will start to ease.

The new Pentium III processor, which will cost $794 in volume quantities, is being incorporated into high-end desktop PCs from Dell Computer and others. IBM, for example, today released its Aptiva 990, which contains a 933-MHz Pentium III, 128MB of standard memory, and a 40GB hard drive for $2109.

Although new, the chip is not Intel's fastest processor. The company came out with a 1-GHz processor in March.

Just as important, the Santa Clara, Calif.-based chipmaker says the new chip should be available in reasonable quantities. Intel has been shipping the processor to major computer manufacturers for the past two weeks, said a company spokesman. Select resellers around the country are already selling the chip and have it in limited quantities.

Healthy supplies of the new chip will likely be greeted as a sign of optimism for computer makers and Intel investors. Tight supplies of Pentium IIIs, caused mostly by strong demand and limited manufacturing capacity, have been a problem for Intel since last October. The shortage not only dented the first-quarter earnings of Gateway but allowed rival Advanced Micro Devices to gain greater traction in the market.

For the past few months, for instance, the fastest and most expensive consumer PCs have been based on AMD's Athlon processor. Intel-based computers have largely occupied the middle and budget tiers.

"There are still shortages. Customers aren't going to get as many chips as they want, but there are indications that things will start to ease up by the end of June," said Charles Boucher, semiconductor analyst at Bear Stearns. "The pipeline now is completely dry, but you will start to see a trickle by July."

The choke-hold, nonetheless, will linger. The 1-GHz Pentium III is still being sold only to major computer makers, and volume quantities won't be ready until the third quarter, the company spokesman said. Finding Pentium IIIs at 800 MHz and above remains fairly difficult, said one dealer. By contrast, 950-MHz Athlon chips are easy to find.

Benchmark tests on Anandtech show the chip performs comparably with AMD's 950-MHz Athlon. The Pentium III, tested with Rambus memory and standard memory, wins out on some game benchmarks but loses on other tests. In any case, the results are close in nearly all the tests.

Today's announcement marks the first in a series of chip advances coming in the next few weeks. On Sunday, Intel is expected to cut prices on its desktop processor line. This likely will inspire competitive cuts from AMD.

During the week of June 12, AMD will officially release its Duron processor, a new version of Athlon geared toward budget PCs. As reported earlier, the chips will initially run at 600 MHz, 650 MHz and 700 MHz, with a 750-MHz version to follow. The chip will contain 64KB of secondary cache, a data reservoir located close to the processor that improves performance.

Chip competition

Not to be outdone, Intel two weeks later will release Celeron processors, which will compete against Duron, running at 633 MHz, 667 MHz and 700 MHz, according to sources. The 633- and 667-MHz chips originally were slated to appear in April but were pushed back because of the manufacturing crunch.

Around the same time, AMD is expected to release "Thunderbird," a spiffed-up version of Athlon for the luxury end of the market. Unlike current Athlons, Thunderbird will contain 256KB of integrated cache, which will enhance performance. Some Thunderbirds also will be made with copper wires rather than aluminum, a first for AMD and a technological shift that Intel will not make until 2001.

Then, in the second half, Intel will counter with "Willamette," a performance processor for desktops. Built around a new architecture, the chip will run at 1.4 GHz when it debuts, Intel has said. Volume quantities are expected by the holiday buying season, the company has said. Around this time, AMD will release "Mustang," another improvement on Athlon.

Although AMD enjoyed record profits last quarter, the company will face increasing pressure in its high-speed race against Intel when Willamette comes out, Boucher said. In many ways, it's a battle that will be waged with brute force: Intel has a much larger research and development budget and far more factory capacity.

"The big concern is, will they be able to bring out a chip that competes against Willamette," he said.

Willamette, however, will require systems with Rambus memory, which remains in tight supply, according to several sources.