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Intel's march on the inside

The Intel740 graphics chip could in many ways be the beginning of the end game in the graphics world.

The Intel740 graphics chip could in many ways be the beginning of the end game in the graphics world.

With its new graphics chip coming out tomorrow, Intel will have a product for every major data-processing chip used inside PCs and workstations. Microprocessors, chipsets, and graphics processors will be pumped out of Intel plants--along with the Intel circuit boards that hold them.

Intel motherboard

Although the new Intel740 chip--formerly code-named i740--will only be one of several high-performance 3D chips on the market, it will enjoy an extensive network of vendor relationships that could make more it pervasive than arguably better chips. Moreover, Intel's renowned manufacturing might will give it a leg up on competitors, allowing the chip giant to deliver faster and faster chips at increasingly lower cost.

Intel, in fact, is already admitting that the company will make the chip ubiquitous. Initially only available on separate add-on cards which plug into a PC's circuit board, the chip is expected to become an intrinsic part of the company's impressive panoply of chips, which come standard on many of the PCs worldwide.

"You will see it this year on motherboards," said Brian Ekiss, marketing manager for the just-formed Graphics Components Group at Intel, referring to the main circuit boards used in PCs. "We're committed to being in this market segment...You will be able to buy a processor, chipset, and graphics processor all in one machine tuned to work together."

Intel will also in all likelihood come out with a variety of graphics processors to fit different PC price points. Ekiss said Intel would consider integrating graphics into the Pentium II cartridge if this is what customers wanted at the low end of the market.

This, more than the technology behind the Intel740, is what has graphics vendors worried. As stated by one graphics executive, "The technology is not what I fear. I fear them because of their marketing funds and channel play."

Doom and gloom aside, this strategy will likely take time, noted Peter Glaskowsky, graphics analyst for MicroDesign Resources. The chip is a first run for the company and appears to cost about the same to manufacture as competing chips.

Most high-end competitors, moreover, will come out with chips that exceed the performance of the Intel740 within two to three quarters.

The current competitive dynamics, however, are tempered by history. To fuel its growth, Intel continues to look for new markets, a quest that has typically lead to a thinning out of the ranks of competitors. Chipsets--the group of chips which serve as companion chips to the main processor--used to be a thriving business for independent vendors such as VLSI, but Intel's entry into the market ended that.

Chipsets were close to 50 percent of the company's business in early 1995, according to a spokesman there. By September of last year, the figure dropped to a mere five percent because of Intel's presence.

The Intel740 will be launched into the major consumer market. Elkiss said that the chip will initially be targeted at Pentium II machines for consumers in the $1,500 to $2,500 range. Business PCs will follow, however, with the rise of 3D business applications.

Intel is an investor in CNET: The Computer Network.