2001: Ups and downs on the way for chips

Intel will continue keep moving towards e-services, as AMD aims for the corporate market. And Bluetooth may even arrive... maybe

As 2000 draws to a close, the course for the chip business over the next 12 months looks more uncertain than ever. Warnings from chip makers Intel and AMD underscore questions about where the consumer and corporate PC markets are heading, and the introduction of next-generation chips by both players will change the playing field for consumers, manufacturers and developers alike.

Most PC makers, along with Intel and AMD, issued profit warnings in the fourth quarter of 2000, on the back of a softening economy and decelerating sales. Intel said a number of large clients had cancelled orders. How the trend will carry on through 2001 is anyone's guess, but most analysts expect the first half of the year to be ugly.

On the other hand, consumer PC sales worldwide are still healthy and look set to grow 20 percent in the fourth quarter of 2000 according to IDC. Sales of Windows 2000, which have so far failed to take off, could also boost PC sales in the second half of the year.

What will take the place of the race to 1GHz in 2001? AMD and Intel have eased the pace in the second half of 2000 but both will break the 2GHz barrier in 2001. Intel will have to work hard to get the Pentium 4 down into the mainstream markets. It also needs to gain acceptance for the new 64-bit chip, Itanium.

AMD will join the 64-bit game at the end of the year with the Hammer and is making much of the fact that it maintains backwards compatibility with previous IA-64 designs. AMD intends to barge its way into the corporate market with the AMD 760 chipset and Palomino processor core. It will also extend its reach into the low-cost PC space with Duron.

Intel is still in the middle of its transformation into supplier to the e-services and communications industries.

Rambus will continue its many court battles and will have to fend off counter-attacks from memory manufacturers who don't want to pay royalties on DRAMs. But its real success could lie with Pentium 4, which exclusively relies on Rambus, at least for now. Analysts say Rambus memory prices are coming down, and with legal question marks over competing DDR memory Rambus could be in the ascendant in the new year.

Bluetooth, the wireless system for linking PCs, peripherals and mobile devices, will face a test in the coming year. Manufacturers will have to bring down costs of building the kit and work out technical issues in order to make Bluetooth more than an exotic add-on. But demand for wireless products is still strong -- having so far escaped the slump that has hit the PC market -- giving manufacturers an incentive to make Bluetooth work.

Who do you think was the most influential chipmaker of 2000? Many would put their money on Intel, or perhaps even AMD, but John spooner puts his vote firmly with Transmeta even though it is apparent that little love is lost between Transmeta and the PC makers. Go to AnchorDesk UK for the news comment.

See Chips Central for daily hardware news, including interactive roadmaps for AMD, Intel and Transmeta.

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