The 1GHz race is on

Escalating rivalry between Intel and AMD expected to pay shoppers an unexpected dividend next year and beyond

Just as the 1960s space race paid unexpected dividends in the coin of new household conveniences, experts say the spillover from the AMD-Intel competition to debut a one gigahertz chip is going to drive down computing costs in the new year and beyond.

Both AMD and Intel have already gone on record saying they expect to reach the gigahertz mark by the end of next year, a claim observers of the chip scene fully expect will be realised. "Over the last two years, consumers looking for value-oriented systems saw performance skyrocket and prices plummet, in part due to the battle between the K6-2 and Celeron," said Mike Feibus, a principal at Mercury Research in the US. "Now, we've got a dogfight at the high-end, which means buyers of premium PCs are in for a similar boon in 2000."

The two chipmakers are within hailing distance of the magic mark although the crown for the winner of the speed competition is up for grabs. On Monday , AMD leapfrogged Intel's 733MHz Pentium III chip with its new 750MHz Athlon PC processor. This marked the first time AMD produced a chip built on its 0.18-micron manufacturing process. The process, which is similar to a 0.18-micron process used by Intel, will allow the company to boost Athlon to 1,000MHz.

The demand for more processing power among hard-core users in the computer game community is insatiable. In contrast, it's unclear whether average PC users will react to the arrival of 1GHz performance with the same enthusiasm or a collective shrug. Observers of the chip scene point out that the one gigahertz mark is just that, a mark. Instead, it's getting to that goal that is expected to produce the biggest benefits for consumers.

As AMD and Intel one-up each other in performance, PC buyers should expect a steady stream of new high-end chips hand-in-hand with steady price cuts, according to analysts. They also expect prices for mid-range chips to similarly drop down the pricing ladder. Here's the ace kicker: By the same time next year, today's 750MHz or 800MHz chip will become the low-cost, entry-level processor in the market.

"The upside here -- especially for the customer who's sensitive to overall performance -- is that both companies are beating each other about the head and shoulders to accelerate the rate at which new (chips) are brought to the market," said Nathan Brookwood, a principal with Insight64, of Saratoga, California. "As long as (AMD) can come out with a product that is $700 (£420) or $800, it bodes well for the company. It bodes well for the customer."

Indeed, AMD says an enhanced version of Athlon, based on a new processor core, will reach the 1GHz level by the second part of next year. Analysts say AMD may be sandbagging. The company presently has an 800MHz chip scheduled for release in the first quarter while a 900MHz Athlon is also in the works. "AMD could clearly jump out now with an 800MHz part. However, what does it get them to be that much ahead of Intel?" Brookwood said.

For its part, AMD is playing it coy. A spokesman said it wasn't so much as a matter of introducing a 1GHz part. "It's whether there's sufficient demand that warrants a product launch," said the spokesman. Intel has made public its intention to ship an all-new desktop chip, running at 1GHz or faster next year. This chip, code-named Willamette, is also due in the second half of the year and will probably ship late in the third quarter.

That leaves the Pentium III. Will it reach 1GHz?

Intel's current Pentium III, sometimes referred to as Coppermine, has "headroom to about 900MHz," Brookwood said. However, "It's conceivable that Coppermine would get to 1GHz." Intel will attempt to push Pentium III on 0.18-micron to 1,000MHz, said Pat Gelsinger, an Intel vice president and general manager of its Desktop Products Group said in an interview earlier this month.

That should make it interesting for PC buyers, who should look for the companies to trade jabs well into the new year.

While AMD has an 800MHz Athlon chip waiting in the wings, Intel has an 800MHz Pentium III in the works as well. The company will ship its 800MHz later in the first quarter. A 750MHz Pentium III may come early in the new year.

AMD will likely ship the 800MHz Athlon, followed by an 850MHz and 900MHz version as the year progresses. Intel will likely ship Pentium IIIs in 750MHz and 800MHz followed by speeds of 866MHz and 933MHz, Gelsinger told ZDNet.

Take me to the Pentium III Special.