The Pentium 4, which will initially come out at 1.4 GHz and 1.5 GHz, will serve as the cornerstone of the company's processor line for the next several years. The chip will first appear in high-performance desktops, but later migrate to servers, workstations, notebooks and subsequent generations of processors.
Formerly code-named Willamette, the Pentium 4 is based on an entirely new architecture. The Pentium III, Intel's current flagship, derives from an architecture originally revealed with the Pentium Pro in 1995.
The new chip will give Intel an opportunity to break out of a cycle of product miscues. Since the beginning of last year, the company has lurched from one problem to another, despite growing revenues and profits.
About a year ago, for example, the company had to delay an enhanced version of the Pentium III. When the chip finally came out, demand became overwhelming, and Intel found itself faced with a shortage that continues to linger.
This year, the company had to recall the 1.13-GHz Pentium III as well as budget computers because of a flaw in a chip called the Memory Translator Hub. Other products, including the long-awaited Itanium chip for servers, were delayed. Meanwhile, rival Advanced Micro Devices grabbed market share with its Athlon processor.
The company dropped another bombshell yesterday when it said revenue for the third quarter would be substantially lower than expected, an announcement that has pummeled the company's stock.
Intel has said the Pentium 4's "NetBurst" feature will improve how computers handle tasks--such as data encryption or video compression--that have grown in popularity with the Internet.
"It will be the highest-performing processor for PCs," Albert Yu, senior vice president of the Intel Architecture Group, said in a recent presentation on the chip. "We're moving into streaming video; speech has become much more commonplace than a year ago. Peer-to-peer (networking) has been around for a long time, but it is now being recognized as the computing paradigm of the future."
Overall, the architectural changes will lead to better performance for multimedia applications but incremental improvement with standard desktop applications such as word processing, according to analysts.
"In the short term, there is going to be an incremental improvement, but the big news here is that the P4 is going to give Intel a lot of headroom in the future, not just for the fall but for 2002 and beyond," Linley Gwennap, principal at the Linley Group, said last month.
On the financial side, however, the Pentium 4 won't be an easy play for Intel. The chip will measure 214 square millimeters, making it more than twice as large as current Pentium IIIs. Generally, the larger a chip is, the more expensive it is to make. Intel will shrink the chip next year.
The company has said it will manufacture "hundreds of thousands" of Pentium 4s this year.