Intel's new bag of chips

In the face of a down economy, Barrett showed how the leading chipmaker was focusing on building technology for the future. Some of the specifics he outlined were plans for a number of new processors, including the Itanium 2 server chip, expected in the second half of 2002, and Banias, the code name for a new notebook chip due in early 2003.

He emphasized that Intel would see revenue growth this year, although the precise timing of when technology companies would resume spending was still unclear.

Barrett said that even though the economy may be weak, the growth of the Internet and the infrastructure needed to support it will help bolster the industry at large. And because of this, technology companies still need to work and create with an eye toward the future.

"Technology doesn't stop during recessionary periods," Barrett said.

Also at the meeting, executives outlined several important manufacturing technology transitions, including the company's move to producing 130-nanometer chips on new 300-millimeter wafers.

The move from 180-nanometer chips to 130-nanometer chips will allow the company to increase chip clock speed and reduce power consumption. The move to larger 300-millimeter wafers, the basic unit of chip production, allows chipmakers to produce about 2.5 times more chips per wafer, increasing production volume. It can also reduce per-chip manufacturing costs considerably.

By the end of the year, Intel hopes to have six factories making chips on 300-millimeter wafers, which it says will lower its manufacturing costs about 35 percent. And for 2004, the company is looking at moving to manufacturing 90-nanometer chips.

Intel executives said that the company has resurrected Fab 24, a manufacturing plant being constructed in Ireland. Fab 24 was scheduled to open in the second half of 2001, but Intel postponed the opening amid a PC market slowdown in 2001. Intel now plans to open the plant in 2004 to support a 90-nanometer chip manufacturing line that uses 300-millimeter wafers.

Itanium, part two
The Itanium 2 is the successor to Intel's current 800MHz Itanium server chip and the second chip to use the company's 64-bit technology. Due in the second half of the year, the Itanium 2 will offer higher clock speeds and significantly improved performance over the current chip, Intel has said.

The chip will be introduced at midyear at 1GHz and will ship in high-end servers and workstations used to store large databases or compute mechanical designs.

Meanwhile, Paul Otellini, Intel's president and chief operating officer, walked investors through a host of new desktop and mobile Pentium 4 chip introductions the company has planned.

He started with a demonstration of the forthcoming Banias chip, a low-power mobile processor due in the first quarter of 2003. The chip will offer competitive clock speeds along with a new chipset that integrates 802.11 wireless networking capabilities. The combination of the two will help notebook makers cut power consumption by about 25 percent, Otellini said.

Otellini also gave an update on the company's desktop and notebook Pentium 4 plans. The desktop chip, now running at 2.4GHz, will hit 2.53GHz later this quarter and 3GHz during the fourth quarter, he said.

The 2.53GHz Pentium 4 will bring an increase in bus speed, from 400MHz to 533MHz, which will boost desktop PC performance. The bus provides a data pipeline between the processor and RAM (random access memory).

"We remain on track for a 3GHz launch in the fourth quarter of this year," Otellini said.

Intel will begin transitioning its Celeron chip to Netburst, the chip architecture of the Pentium 4, later this quarter. By the end of the year, about 80 percent of its Celeron chips will be based on the newer architecture.

"This allows us substantial gigahertz headroom," Otellini said, which should allow the company to keep the chip competitive with Advanced Micro Devices' Duron processor.

On the notebook side, Intel's mobile Pentium 4-M chip will hit 2GHz by midyear, Otellini said. Intel just this week bumped the chip from 1.7GHz to 1.8GHz.

More to come
Intel also plans to begin shipping small quantities of its Wireless Internet on a Chip to partners for testing during the second half of the year. The Wireless Internet on a Chip processor technology, first announced last May, combines the duties of a processor, memory and a DSP (digital signal processor) in a single chip.

Intel has said the new chip, which can do everything from application processing to storing data and refining analog signals, should help device makers cut costs and reduce power consumption. These benefits could then lead to smaller handsets with longer battery life, for example. Intel has not yet announced pricing on the chip.

Meanwhile, as an interim step, Intel will offer new chip packages that allow device makers to put several chips in the same space by stacking them on top of one another.