It's official: AMD hits 1,000MHz first

AMD just broke an important processor clock speed barrier.

Advanced Micro Devices Inc. announced Monday that it is shipping a 1GHz, or 1,000MHz, Athlon processor. PC makers, including Compaq Computer Corp. (CPQ) and Gateway Inc. (GTW), followed suit, announcing 1GHz systems based on the chip. Leadtimes on Gateway 1GHz Athlon systems are expected to be between one week and 10 days, company officials said Monday. Compaq, which begins taking orders on Thursday, expects to have similar lead times.

The AMD (AMD) announcement beats Intel Corp. (INTC), which is expected to make a similar announcement later in the week, to the punch.

AMD and Intel have been locked in a clock-speed battle since Aug. 8, when AMD announced its Athlon processor at 650MHz. The chip has since been able to consistently outpace Intel's Pentium III in what has become a race of clock-speed one-upmanship to the landmark 1GHz speed.

Steve Lapinski, director of product marketing of AMD's Computational Products Division likened the achievement to the first time a US Airforce plane broke the sound barrier.

"AMD advanced the (1GHz Athlon announcement) in response to demand from our customers," he said. "Our customers, in this case, were Gateway and Compaq."

AMD had been working with Gateway and Compaq for the last six weeks in order to qualify the new chips for sale. Those PC maker's high end customers, Lapinski said, were demanding more processing power for their high-end applications. AMD has committed all of its initial 1GHz production to Gateway and Compaq, Lapinski said. The company will begin shipping the chip to all the rest of its customers in April, he said.

"We plan to ship hundreds of thousands of Athlons at the 900MHz level and faster in the second quarter, with a signifigant portion of those shipments being 1GHz chips," Lapinski said.

The new chips are of the current generation of Athlon processors. They are based on AMD's 0.18 micron manufacturing process, with 512KB of external level 2 cache and support for a 200MHz system bus. The system bus provides a data pipline between the chip and system compontents, such as memory.

Along with its 1GHz Athlon processor, Sunnyvale, Calif.-based AMD announced 900MHz and 950MHz versions of the chip.

Intel, however, is close behind. Sources said Intel will announce its 1GHz Pentium III processor on Wednesday.

With Intel and AMD chips reaching 1GHz, consumers are thinking: What's in it for me?

Or, in other words: Where can I buy a 1-gig machine? How much will it cost? And what will I need it for it, anyway?

PC makers should begin shipping their 1GHz PCs by the end of March, if not sooner. Compaq will start taking orders on its 1GHz Athlon-based 5900Z Presario PC on Tuesday. Gateway began taking orders Monday on its Gateway Select 1000 Deluxe 1GHz Athlon PC.

For consumers, the introdution of the fast new chips means powerful desktops that render graphics for games or graphical design applications very quickly. (For what it's worth, they load Microsoft Word quite quickly, as well.)

For the majority of consumers, however, reaching the gigahertz mark means more-powerful, lower-priced chips for midrange PCs as Intel and AMD cut prices on their older chips to make room for their newer, faster offerings. This is where the majority of the word processing, Web browsing public will see the most benefit. As higher-clock-speed processors are introduced, chip makers reduce the price of the speediest chips they're currently manufacturing. This allows consumers to purchase more megahertz for their dollar.

Consumers seeking a faster machine benefit from the competition between Intel and AMD because they will be able to purchase their 1GHz PCs much sooner than originally expected. Previously, 1GHz chips were not due until the second half of this year.

The new chips will carry an initial price premium. The 1GHz Athlon will cost $1,299 in 1,000-unit quantities, according to AMD. The 950MHz will cost $999. The 900MHz will cost $899.

While those prices will come down as the chip becomes readily available, the initial high cost will translate into Pentium III-based PCs costing upward of $3,000 when including the cost of a monitor.

Despite their initial cost, analysts predict 1GHz PCs will sell well.

"There's no denying that 1GHz will be a pretty compelling marketing button," said Mike Feibus, principal analyst at Mercury Research.

The Gateway Select 1000 Deluxe will start at about $3,100 with a 19-inch monitor, 128MB of RAM and a 30GB hard drive, the company said.

Compaq's 1GHz 5900Z PC, when configured with a 17-inch monitor, 128MB of RAM and a 30GB hard drive, will be priced at a more reasonable $2,499, according to the company.

With AMD now having announced its 1GHz as well as 900MHz and 950MHz chips, all eyes are on Intel.

The chip maker is expected to announce its 1GHz Pentium III chip on Wednesday.

Intel officials would not confirm the date; however, the company has said it will have "limited" supply of gigahertz Pentium IIIs out in the second quarter, with volume coming in the third quarter.

"We will target 1GHz in the first half to people that can really appreciate it, such as PC enthusiasts, such as high-end gamers," said Intel spokesman George Alfs last week. "It really will be limited volume in Q2."

PC makers Hewlett-Packard Co. (HWP) and Dell Computer Corp. (DELL) are expected to offer systems based on the 1GHz Pentium III chip.

"We're supporting 1GHz Pentium III," said an HP spokeswoman on Thursday. "We will be shipping consumer models (in HP's Pavilion line of PCs) starting later this month ... and most likely shipping corporate (desktop PC) models in June."

HP also sells consumer PCs that use AMD's Athlon chip. However, it is unclear if the company will also offer a 1GHz Athlon system.

"We are going to have a (Dimension) product," a Dell spokesman said. However, "we don't have a date yet." While dates are not final, it is likely that Dell will have its 1GHz Pentium III-based Dimension PC by the end of the month as well.

It is unclear just how hard it will be to get a 1GHz Pentium III, initially. However, short supplies of the 1GHz Pentium III, in a case similar to the company's 800MHz Pentium III, which was in short supply following its announcement, will surely frustrate consumers.

However, analysts say the higher initial pricing on some 1GHz PCs may limit demand.

"My guess is that pricing will take care of that until there is greater supply," Feibus said.

The Pentium III-based PCs initially will be priced higher than 1GHz Athlon-based systems.

One source estimated those systems that include Rambus memory will be priced close to $4,000.