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2000 Roundup: Chips broke 1GHz, but market yawned

In a year when PC chips reached new heights of performance and efficiency, customers simply weren't buying

2000 was the year PC chips broke the 1GHz barrier, though to judge by the declining growth rate for PCs in the US, this was no great revolution.

The year kicked off with breakthroughs in chip research and the launch of supposedly easy-to-use information appliances. But the year ended on a sour note with profit warnings from the biggest consumer chip companies and a disappointing no-show by one of the coolest emerging wireless technologies, Bluetooth.

In January Transmeta finally launched its low-power mobile chips for laptops and appliances, launching a wave of speculation as to how the chips might revolutionise mobile computing. The arrival of Transmeta's Crusoe chip inspired Intel to launch SpeedStep, its own power-cutting system. AMD followed suit with PowerNow.

Dataquest predicted 2000 would see strong growth for the chip market.

February saw AMD embroiled in competition and controversy. The chip maker, David to Intel's Goliath, demonstrated a 1.1GHz Athlon microprocessor, shortly before Intel demoed its own 1.5GHz creation.

AMD boss Jerry Sanders told ZDNet he sees Intel's 64-bit strategy, with the IA-64 platform, as a huge strategic gap through which AMD plans to drive its own 64-bit chips, dubbed Hammer.

Michael Dell, commenting on why Dell still refuses to use AMD processors, said the AMD environment is too "fragile".

1GHz microprocessors were finally announced in March, though the only ones that were available in any volume were from AMD. Intel continued to struggle to supply other speed grades of its Pentium processor as 1GHz machines trickled into Europe.

Microsoft announced details of its Xbox game console for the first time -- and, contrary to reports at the time, the machine calls for Intel rather than AMD chips. The same month, getting on the gaming action, Rambus sued Sega and asked for its recently-launched Dreamcast console to be blocked from sale.

AMD launched its "value" chip -- based on the advanced Athlon processor -- in April, and named it, er, Duron. Alas, it turned out that it shared its name with a vendor of quality paints and wallcoverings. The company also demonstrated its first system using DDR DRAM, an advanced memory technology designed for super-fast systems.

Researchers at the University of Southern California and the University of Washington claimed to have created a new "opto-chip" that could dramatically speed up the transfer of data across networks -- potentially leading to a much faster experience for Web surfers.

Intel was still suffering serious supply problems by May, and said things were likely to remain grim for as long as a year. Though the newer chips might be difficult to find, they were quietly cutting manufacturing costs and boosting efficiency with new "flip-chip" packaging, which combined components such as memory cache and CPU on a single die.

Via Technologies, the Taiwan-based maker of chips and chipsets, admitted a mistake in naming the Apollo KZ133 chipset -- "KZ" was Nazi shorthand for "concentration camp" in World War II. The chipset was renamed KT133.

Intel finally announced the official name for the successor to the Pentium III in June, dubbing it Pentium 4, to no-one's great shock. Transmeta landed a deal with AOL and Gateway to manufacture a consumer Internet appliance, one of the chipmaker's first big contracts. AMD began shipping Duron in volume.

It was a good month for Rambus, which settled its lawsuit with Hitachi and arranged to receive royalty payments for Hitachi's memory products. The news reassured investors and gave Rambus shares a huge boost.

Itanium, the first 64-bit chip from Intel, slipped behind schedule in July, though some said the delay was probably good news for Intel. In the same month Intel defended its mobile flank by suggesting Transmeta chips could have compatibility issues since they don't support all of Intel's extensions to the x86 instruction set.

Craig Barrett, Intel's chief executive, summed up the company's performance for the year so far by admitting Intel "should have done a better job".

As the year wore on industry-wide shortages hit more big players, notably Sony, which warned of difficulties meeting demand for PlayStation2. Intel shares were downgraded on supply issues.

In October Intel finally cancelled the ultra-low-cost Timna processor citing spiralling costs that made the chip unmarketable. Intel also delayed Pentium 4 from its planned Halloween launch. Crusoe began to emerge in products, but failed to perform up to expectations -- though analysts said the problem would be temporary.

NEC was forced to recall some Transmeta-based notebooks because of a manufacturing flaw. Semiconductor stocks, reacting to all the bad news, fell to a nine-month low.

There were some bright spots: Parthus and Psion (quote: PON) announced a "system on a chip" designed specifically for 3G wireless devices. 3Com unveiled its latest attempt at a wireless Internet appliance in the form of a white plastic tub called Audrey. Experts wondered, however, whether the toilet-like gizmo might just be a flash in the pan.

November brought the long-awaited launch of Pentium 4 -- not that anyone was awfully impressed by the chip's initial incarnation, which was a bit slow and very expensive.

Transmeta, reacting to concerns over its chips' performance, promised to crank up the power, even as IBM cancelled its plans to use Transmeta's Crusoe in laptop computers. None of this stopped the company's stock price from doubling in its Wall Street debut. Transmeta also got a boost from the launch of AOL and Gateway's Transmeta-based Internet appliance.

IBM came out with a new optical chip design which it hopes will revolutionise high-speed communications networks.

In December both of the main consumer chipmakers, Intel and AMD, summed up the effects of slowing demand for PCs in the US and Europe by warning that their profits would take a hit. Intel also delayed plans to build a chip plant in Ireland.

And what about Bluetooth, with its promise of eliminating all those wires connecting PCs to handhelds to laptops to peripherals to mobile phones? It has overcome some technical hurdles but products are still held back by manufacturing costs and other factors. "2001 won't be the year of Bluetooth," was one analyst's gloomy prediction.

Puns and other poor jokes inspired by Graeme "the Pun Kid" Wearden

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