Intel-AMD: It's a post-gigahertz hangover

Following a mad dash to develop 1GHz processors, rivals AMD and Intel are taking a chip breather. Sort of

While PC chip makers Intel and Advanced Micro Devices drove pedal-to-the-metal to reach the 1GHz mark for their desktop processors, the two are looking to return to a more normal (read: slower) pace for the introduction of new chips.

The titans are preparing gigahertz-plus desktop chips, but consumers shouldn't expect to see them right away. Instead, most of the action will come with price reductions on 1GHz PCs, a benefit of ramping production.

Since their introduction in March, these PCs have come down in price from $4,000 (£2,669) on average, to at or under $3,000, depending on configuration.

AMD will begin revving up its new 1GHz Athlon, code-name Thunderbird, with versions over the gigahertz mark later in the year. AMD is planning a 1.1GHz Athlon chip, based on Thunderbird, in the third quarter, sources said.

Thunderbird's performance improvements consist mainly of a new 256KB cache integrated into the chip, as opposed to the external, much slower, 512KB cache present in previous Athlons. PCs using the T-bird chip will be labeled with a sticker that says, "Performance Enhancing Cache Memory" to distinguish the two Athlon flavours for consumers.

Like exhausted fighters, AMD and Intel are taking a breather from their breakneck chip battle AMD may discuss plans to push past 1GHz at next week's PC Expo in New York, although the company's focus is expected to be on notebook processors with its PowerNow battery-saving technology.

Based on the two bookends, a 1.1GHz chip in Q3, according to sources, and a 1.5GHz chip due next January, it is likely that AMD will launch chips in 100MHz increments, including a 1.2GHz Athlon late in Q3, a 1.3GHz in early Q4 and a 1.4GHz in late Q4.

Competitor Intel is also eyeing gigahertz-plus speeds for its Pentium III chip. However, it is unlikely the company will offer more than two more speed upgrades for the chip.

"I think you'll see us stretch at least one notch above 1GHz, maybe two," Paul Otellini, Intel executive vice president, told analysts in April.

Here's where it gets somewhat tricky. The two speed grades described by Otellini would likely be 1066MHz and 1133MHz, based on the Pentium III's system bus multiplier. As a result Intel will offer, later in the second half, only one more clock speed grade, labeled as "1.1GHz," sources said.

It is likely that the 1.1GHz chip will be a clocked-down version of the 1133MHz chip, although the company is still in discussions with PC makers as to what to do about the situation.

A question for consumers is, however, can Intel make enough of the new chips? The company has wrestled with product shortages, although it says its 1GHz Pentium III chips are now in better supply.

"We're going to have to increase availability for the second half to meet increased demand. I think we're going to be in good shape," said George Alfs, an Intel spokesman.

However, analysts said that AMD is cranking out many more 1GHz Athlons than Intel is producing1GHz Pentium IIIs. Mercury Research estimates that AMD is out-shipping Intel by a 12:1 margin when it comes to 1GHz chips. That gap closes for processors that are 900MHz and above, with AMD shipping three 900MHz or faster chips to every one that AMD ships. (However, in fairness, Intel's only 900MHz or faster chip had been its 1GHz, up until the introduction of the 933MHz PIII one month ago. Meanwhile, AMD has been shipping its 900MHz and 950MHz Athlons since early March.)

"Quite clearly, the heart of Intel's manufacturing process is really tuned between 600 and 750MHz. They've certainly brought that up over time, but that's where it's at," said Dean McCarron, a principal analyst at Mercury Research in Flagstaff, Arizona.

He said, however, that Intel is tweaking its manufacturing process to make the processor run faster. "Our expectation is that they'll certainly be able to deliver in the range of 100,000 units by Q3," McCarron said.

Intel, for its part, has said it doesn't expect to hit volume with the 1GHz Pentium III until the third quarter. And Intel is looking to another chip, its Willamette, to take over the clock speed lead.

Willamette is presently sampling to PC makers, who are using early versions of the chip to build and test systems.

When it comes to Willamette, soon to receive a new name, Intel is shooting for 1.4GHz at introduction in the fourth quarter. The company, as reported by ZDNet News, will add a 1.3GHz chip, also in Q4.

Intel is planning to be at 1.5GHz in the first quarter of next year. It is logical to assume that Intel will continue to up the speed of Willamette with one or possibly two speed grade introductions per quarter.

Intel and AMD are driving each other to produce faster chips more quickly -- but do consumers really care? If it weren't for pressure from AMD, Intel wouldn't have announced its 1GHz Pentium III so soon. Competition will dictate much of the decisions made over the next few months and would certainly prompt Intel to introduce faster parts more quickly.

AMD, however, despite its wider availability and Athlon's ability to quickly scale past the Pentium III in clock speed, will not take advantage of these opportunities to pour on the megahertz before Intel ships its Willamette chip.

Analysts said this is because the ideal strategy for a chip maker is to hold back delivery of faster chips in order to sell out current-generation processors. The hold-back strategy also allows the chip maker to stock up on parts, allowing plenty of inventory when the new chips debut.

Sure, AMD could blow Intel out of the water with a wave of faster chips. But the company could use a slow down of its own, said Mike Feibus, principal analyst at Mercury Research.

"It's not a necessity to go above 1GHz any time soon," he said. From a business standpoint, "It's a whole lot easier and more profitable to slow it down."

Now that the gigahertz barrier has been broken, what's next? Will anyone care when we pass 2GHz? Michael Caton thinks not. Go and read the news comment at AnchorDesk UK.

What do you think? Tell the Mailroom. And read what others have said.

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