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New P4 chipset sneaks into market

PC makers begin quietly selling machines based on a combination of double data rate memory and Intel's new high-performance versions of the Pentium 4.

Intel provided PC buyers with some new options on Monday, as double data rate memory quietly made its debut alongside the Pentium 4.

Dell Computer, Gateway, Hewlett-Packard and other PC makers have started to sell Pentium 4 PCs containing DDR SDRAM, a faster version of standard memory, via their Web sites. The combo is made possible through a new version of Intel's 845 chipset.

The chipset and the PCs won't be officially released until January, but Intel has allowed manufacturers to market them early. The release will coincide with new, high-performance versions of the Pentium 4.

Obscure as the news may sound, these new PCs mark a milestone in PC marketing. For years, Intel promoted memory (called RDRAM) based on designs from Rambus as the standard for future PCs. Memory and PC makers, however, became increasingly bitter about the high cost and production delays associated with RDRAM. Not coincidentally, chipmaker Advanced Micro Devices and chipset manufacturer Via Technologies, neither of which promote RDRAM, began to gain market share.

Last year, Intel pulled an about-face: It said it would begin to make chipsets that would accommodate standard memory and DDR SDRAM.

Although Rambus provides the best performance, nearly every PC maker has flocked to less-expensive alternatives, which will push Rambus to the desktop fringes, according to some analysts.

"Eventually, going forward you're going to see a large portion of the market become DDR, while the very bottom of the market remains SDRAM," said Dean McCarron, principal analyst at Mercury Research. Rambus "fits in as a tiny sliver at the top of the market for people who want to have every bit of performance...and are willing to pay significantly more for it."

Rambus, though, says it has seen a performance advantage of about 10 percent on average and up to 40 percent on memory-intensive applications when compared with DDR SDRAM, said Frank Fox, vice president and general manager of Rambus' RDRAM Solutions Division.

As a result, "we think that there's a compelling performance advantage for RDRAM systems," Fox said.

With DDR, PC makers have created a good, better and best structure for their desktop lines. DDR will outperform lower-priced PCs using standard SDRAM, but will cost less than the highest-end desktop models using Rambus' RDRAM.

Indeed, the new DDR desktops will cost about $100 more than similar systems that use standard SDRAM, but will still cost about $100 less than similar offerings with RDRAM.

Dell's newest desktop lineup is a good example. Dell added a new Dimension 4400 PC, which uses the new chipset and DDR SDRAM, to its desktop line on Monday.

The machine starts at $987 without a monitor and includes a 1.7GHz Pentium 4 processor, 128MB of DDR SDRAM, a 20GB hard drive, a 16MB graphics card from ATI Technologies, and a three-year warranty. Meanwhile, Dell's Dimension 4300 with SDRAM and an otherwise similar hardware configuration and warranty is priced starting at $868, $119 less than the Dimension 4400.

Dell's Dimension 8200 with a 1.7GHz Pentium 4, 128MB of Rambus memory, a 20GB hard drive, a three-year warranty, and a 64MB Geforce2 MX graphics card from Nvidia is priced at $1,187, $200 more than the Dimension 4400 with DDR. The Geforce2 MX adds about $60 to the price over the 16MB ATI card offered in the Dimension 4300 and 4400, making the difference about $140. (Dell is offering a free upgrade to a DVD or a CD-RW drive on Dimension desktops through Dec. 20. Otherwise, a CD-ROM is included in the base price.)

Gateway is offering DDR SDRAM in PCs that start off with more high-end hardware configurations--the new 500XL desktop, for example, a member of the Gateway 500 Series. The machine comes with a 1.7GHz Pentium 4, 256MB of DDR SDRAM, a 40GB hard drive, a 64MB Nvidia Geforce2 MX graphics card, and a one-year warranty for a starting price of $1,309.

Hewlett-Packard began offering Pavilion desktops from its build-to-order site on Monday. A desktop with a 1.6GHz Pentium 4, 256MB of DDR SDRAM, a 40GB hard drive, a CD-ROM drive, a 2MB Nvidia TNT 2 graphics card, and a one-year warranty starts at $895.

Compaq Computer will begin pairing DDR and Pentium 4-based PCs starting early next year, a company representative said. An IBM spokesman said that Big Blue plans to offer DDR SDRAM on Pentium 4 systems next year.

A lift for the market?
The new chipset could also give a booster shot to the sagging memory market, at least initially, as demand for DDR SDRAM increases.

Memory makers have been suffering through one of the worst gluts in years, with some manufacturers selling parts below cost to clear inventories. The bloat of products, although decreased in recent weeks, has also prompted industry consolidation. Both Hynix Semiconductor and Toshiba are in discussions with other makers about mergers or strategic partnerships.

"Incredible as the 845 ramp was, the DDR will probably be even faster," McCarron said, referring to the high demand for Intel's 845 chipset earlier this year and the resulting increase in production. "It's not inconceivable that we'll see substantial price increases and rumors of spot shortages (on DDR SDRAM) while it sorts itself out."

DDR SDRAM provides roughly a 15 percent boost in performance over regular memory. While 128MB SDRAM modules were selling for about $8 to $10 Monday, DDR SDRAM modules were selling for $17 to $20, according to the Price Watch Web site. Manufacturers pay even less because they buy in bulk.

When it comes to a price advantage, Fox claimed that DDR SDRAM's is drying up. DDR SDRAM prices, he said, have been inching higher, while Rambus memory continues to fall in price, making it possible for the two to meet in the middle somewhere.

"I think they'll be very close (in price) indeed...based on market dynamics," Fox said, giving RDRAM the price-performance advantage.

The early availability of the new version of the popular 845 chipset is a result of Intel attempting to line up its various PC and motherboard vendors to launch their 845-based products on a single day in January, company spokeswoman Diana Wilson said.

"We're allowing our customers to...stock the channel and officially prepare for the launch in January," Wilson added.

The 845 first launched in early September. It provided the first opportunity for PC makers to offer Pentium 4 systems without RDRAM, which has seen limited adoption, especially among corporate buyers.

Intel is already trying to produce more than 10 million 845 chipsets a month, according to various estimates.

When it came out, the 845-SDRAM combination shaved about $100 off the cost of a Pentium 4 computer, allowing PC makers to offer desktop-and-monitor combinations for about $850. Since then, the price gap has increased.

Intel follows chipset makers such as Via and Acer Labs in introducing DDR SDRAM for the Pentium 4. The Via chipset, however, is the subject of several lawsuits between Via and Intel.

Meanwhile, Taiwan's Silicon Integrated Systems is at work on a new Pentium 4-RDRAM chipset, making it the only other provider of such a chipset, aside from Intel.