Low-cost Pentium II called "kludgey"

Analysts seem to agree that Covington, a stripped-down Pentium II processor, is an interim measure until Intel can deliver a chip that is specifically tailored to the price-performance parameters of the sub-$1,000 market.

"You could say it's kind of a 'kludge' project," said Linley Gwennap, editor-in-chief of The Microprocessor Report. "A Covington chip will have lower performance than an equivalent Pentium II running at the same clock speed."

The chip, in fact, will likely begin to be phased out toward the end of the year when the first Pentium II chips with extra, built-in "cache" memory come to market, said some.

The reason for the skepticism lay in the "cacheless" design of Covington. Unlike other current Pentium II chips, Covington processors will not come with the extra 512 kilobytes of secondary cache memory, a separate high-speed memory chip essential to improving the data flow to the processor.

While removing the cache allows Intel to fit the chip more comfortably into the cost parameters for sub-$1,000 computers, removing the cache results in decreased performance. (Intel is an investor in CNET: The Computer Network.)

"It can't be a Pentium II as we know it without the cache. The Pentium II was designed with a secondary cache," observed Drew Peck, semiconductor analyst at Cowen & Company, implying that the cacheless design can cripple the Pentium II in some respects.

A 266-MHz version of Covington will come out in or around April, said various sources. It will cost approximately $100 to $115 in volume and subsequently go down, John Joseph, an analyst with NationsBanc Montgomery Securities said in January. Compaq, he added then, will release a desktop PC using a Covington chip by early summer. The computer will contain a 4GB hard drive, 32MB of memory, and cost between $700 and $800.

Chief executive Andrew Grove today told an audience at the Intel Developer Forum that Covington would be the first in a series of low-cost microprocessors from Intel. These chips, he said, would also come under their own brand name, which has yet to be determined.

The arguably premature release of a low-cost chip comes as a result of the sub-$1,000 computer revolution, said Charles Boucher, semiconductor analyst for UBS Securities. Last year, sub-$1,000 computers found favor with computer buyers. While Intel managed to discount Pentium chips enough to fit inside the low-end, Intel did not have a chip designed specifically for this market. Covington is thus an initial but not final response from the company.

"They are reacting to shifts that have occurred over the last 18 months," he said.

The chip slated to appear after Covington in this market is a Pentium II chip with extra cache memory integrated directly on the same piece of silicon as the processor. This will in all likelihood be the first mainstay chip in this new effort, theorized Ashok Kumar, a semiconductor analyst. This chip is due toward the end of the year, said an Intel spokesman recently.

Current Pentium II chips use extra cache memory that resides inside the chip's package, but is not integrated directly onto the same piece of silicon as the processor.

While the Covington successors will only integrate memory onto the silicon, subsequent integration will likely go further, said Peck. Do not be surprised to see Intel moving more of the functionality from the chipsets--peripheral chips which work with the processor--and other microcomponents into the integrated processor core, he said. The reason? It will lower cost.

"They have no choice," he said. "A big hole in their strategy is that they have no answer to PC on a chip."