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Intel chip out amid problems

As the company rolls out its most powerful processor architecture yet, it faces a bug that hits multichip servers and also a supply shortage.

Computer makers joined Intel in announcing new corporate lines based on the Xeon Pentium II processor, though a bug and relatively scarce supply may delay the most powerful multiprocessor systems.

A glitch that manifests itself when Xeon chips are used in 4-processor server configurations will delay final testing of those machines until approximately July 17. As a result, "4-way" servers from direct vendors such as Dell won't be out until about the middle of next month, while traditional vendors such as IBM will release systems in two to three months.

On the workstation side, Xeon chips work fine. The problem is that not many have been shipped. Roughly 10,000 processors have been shipped, estimated Richard Dracott, marketing director for processors at Intel.

Although a sizable number by itself, when all these processors are divvied up among the dozens of the largest computer makers, it leaves most with little product. One major computer vendor ventured to guess that it has received 500 chips while another estimated it had obtained 1,000 in total thus far.

As a result, most workstation vendors announced products or product directions, but will not ship products until later in the quarter. So far, Dell is the only major vendor that claims to have Xeon workstations for sale.

Xeon chips are essentially Pentium II chips souped-up for high-end computing. Built around Pentium II cores, they contain two to four times the amount of critical, performance-enhancing secondary "cache" memory, compared to their desktop counterparts. The cache also runs at twice speed of the current cache memory in desktop Pentium IIs.

Xeon processors also support more system memory, and they are the first Pentium IIs capable of handling 4 processors in standard configurations.

The first Xeons released today run at 400 MHz and contain either 512K (kilobytes) or 1MB (megabyte) of secondary cache memory. They cost $1,124 and $2,836, respectively, in volume. 450-MHz versions will be released in September containing 2MB, 1MB, and 512K. The 2MB version is expected to sell for close to $3,700 while the other versions will sell for about the same at the 400-MHz versions today.

The chips are designed to compete against processors from companies such as Sun and Digital. Benchmark tests touted by Intel show that servers and workstations based around Xeon generally exceed performance of Unix machines, and come at a lower price.

"For the workstation industry, we see a new dynamic," said Pat Gelsinger, vice president and general manager of Intel's business platforms group. "We saw the fastest machines on the planet today."

Another interesting part of Gelsinger's presentation was his focus on markets such as digital content creating and mechanical automated design, two areas where Unix has long been dominant. Neil Hand, director of program management at Dell, explained that Xeon workstations improve performance over standard Pentium II workstations by about 18 percent, but only add $700 in cost.

Intel is an investor in CNET: The Computer Network.

Besides being Intel's weapon for getting into high-end computing, the Xeon chip will also be important for Intel's balance sheet. Wall Street has been jittery for weeks that Intel?s earnings will be below expectations and some analysts recently downgraded their estimates slightly for the second quarter.

In April, the chip giant predicted flat revenues for the second quarter vs. the first quarter and said gross margins in the quarter would be down a few percentage points from the 54 percent in the first quarter.

"Xeon is where Intel is expected to carry a good deal of their profits going forward," said Rob Enderle, an analyst with Giga Information Group. "The numbers are small but the revenue opportunity is relatively large."

The public introduction of the chip and new systems took place at Intel headquarters in Santa Clara, California, at an event that mostly featured workstations.

Xeon workstations will cost around $5,000 and up, generally available in the first few weeks after the announcement. Servers are expected later.

Dell Computer introduced its Precision 610 Workstation. The 610 will come with the 512K or 1MB processor, said Jeff Clarke, vice president and general manager of workstations at Dell.

A typical configuration might consist of a 400-MHz Xeon and dual high-performance 9GB hard disk drives and a 19-inch monitor for $7,371. Dell said its systems are available starting today.

The direct vendor will also use Xeon in its 6300 PowerEdge server, said a Dell spokesman. These servers will be capable of running one, two, or four processors.

Compaq, meanwhile, said it will use Xeon in its new SP workstations, which will be announced later this month.

Compaq will also introduce the chip into its ProLiant server line. ProLiant 6000 and 7000 with Xeon processors will appear later this year, followed by ProLiant 6500 and 5500 machines. The 6000 and 7000 will each be capable of handling four processors while the 7000 will contain head room for eight processors, a capability that will come out later this year, said Mary McDonnell, vice president for the server products group at Compaq.

IBM, meanwhile, announced upgrades to its 5500 Netfinity servers. IBM's 1- and 2-way Xeon servers will come out in the 5500 line, while the 4-way servers will come out in the 7000 series, now dominated by Pentium Pro servers. The machines will arrived in 60 to 90 days.

Big Blue's workstations based around Xeon will be rolled out later this year, according to a representative.

Hewlett-Packard announced support for Xeon, but not products. The company will roll out Kayak workstations in the coming weeks and follow the announcement with details on 1-, 2-, and 4-way servers, sources close to HP said.

Gateway said its workstations--available only single- or dual-processor configurations--should be available within the next two weeks. An entry-level E-5250 with 19-inch monitor will be priced starting at $5,499. A system with dual Pentium II Xeon processors will be priced at $9,363.

The company also introduced the new ALR 9200, which offers up to four Pentium II Xeon processors and up to 4GB of memory. The ALR 9400 uses a proprietary system architecture that enables up to six Pentium II Xeon processors to be used. No pricing or availability was announced.

Amid a legal tussle with Intel, Intergraph said it would incorporate the Xeon into its TDZ 2000 by the third quarter of 1998. Recently, the courts granted a preliminary injunction that requires Intel to continue to supply Intergraph with chips and technical information. Intergraph is alleging that its business has been harmed by anticompetitive business practices by Intel.

NEC Computer Systems Division said it would offer customers who purchased the HX4100 and HX6100 4- and 6-way servers, which currently use the Pentium Pro processor, an upgrade kit to the new Xeon processor starting at under $3,000. Additionally, the company expects to offer new 4-way servers based on the chip by the third quarter of 1998.