Intel and AMD chip rivalry yield unexpected user bonanza

With their latest round of announcements, the two chip heavyweights introduced products aimed at power users. But analysts and industry executives point to a wider spillover benefit for consumers: the rivalry is pushing the two companies to launch more powerful chips at a faster clip than they otherwise might.

Intel is looking to round out its suite of desktop PC processor offerings at the high and low ends of the megahertz barometer, later next year. The company, which Monday shipped its 820 chipset for high-end desktop PCs, intends to keep the pressure on rival Advanced Micro Devices, which itself announced plans to ship the 750MHz Athlon processor by the end of the year and the 800MHz version in the first quarter of the year 2000.

Customers benefit when the newer chips are introduced more rapidly and existing chips are reduced in price. eMachines for example, just introduced the $899 eMonster 500A, a new desktop PC based on Intel's 500MHz Pentium III chip.

Intel, whose highest-end desktop chip is the 733MHz Pentium III, plans to ship and 800MHz Pentium III in the first quarter. The strategy articulated by company officials is to keep AMD's forthcoming Athlon-based processors Mustang, Thunderbird and Spitfire from outpowering Intel's offerings on the street.

AMD's Thunderbird is expected to reach the 1GHz level in the second quarter of next year. Intel's Pentium III will match that mark some time next year according to Pat Gelsinger, an Intel vice president and general manager of its Desktop Products Group. Along the way, he indicated, the Pentium III will likely come out in 750MHz, 800MHz, 866MHz and 933MHz versions.

While Pentium III will stay solidly in the middle, Intel plans so-called bookend offerings to cover everything from the very low end to the very high end of the speed spectrum.

At the low-end, Intel will introduce Timna, a device that integrates a memory controller and graphics processor with a new CPU design based on Intel's P6 core. It combines different functions into a single chip with a separate input/output controller. Officials say Timna will drive down end user prices because it allows OEMs to reduce the size and number of components incorporated into a PC motherboard.

Timna is aimed at the sub-$600 (£360) PC market and will likely be used in appliance devices as well, Gelsinger said.

How low can they go? Intel wants to deploy the same 0.18 micron process it uses to build high-end Pentium III chips for its Celeron product line. But even with the thinner wafer, Gelsinger doesn't believe that PC prices will fall below the $399 level any time soon. "It's just really hard to get a bill of materials that gets you to $299," he said.

Meanwhile, Intel is working on the bookend for the other side of the shelf with a new high-speed chip that carries the code-name of Willamette.

Willamette chips will utilise a new 32-bit processor architecture, new chip packaging, a new system bus and a chip set supporting Rambus memory. More information on the forthcoming new processor, and its new architecture, will be released next year.