Check it out. INTC and sub $1000 chip
Intel to release low-cost
Pentium II
By Michael Kanellos
November 4, 1997, 12:40 p.m. PT
Intel will release a low-cost version of the Pentium
II that's stripped of extra features as a way to get
the chip into the booming budget computer
market.
The new chip, to be released in the latter half of
1998, will also present new competitive
challenges to Advanced Micro Devices and Cyrix,
because the new chip may speed the migration
away from the older Pentium chip architecture.
Intel is lowering the cost on an upcoming version
of the Pentium II by removing the "Level 2" (or
L2) cache memory, said Nathan Brookwood,
semiconductor analyst at Dataquest. L2 cache is
a separate memory "island" integrated into the
processor module. Its use speeds the amount of
data that can be fed to the processor, thereby
improving overall system performance.
The Pentium II 's L2 cache consists of 512K of
additional memory, and adds approximately $20
per chip to Intel's manufacturing costs. In all,
Pentium II chips cost between $80 to $100 to
produce. Pentium IIs eventually sell to computer
vendors for between $400 and $700.
To get to the low end of the market, Intel needs
to bring the Pentium II's price down to $75 to
$100, so that it's comparable to the current
Pentium MMX chips. To do that, manufacturing
costs have to drop to between $50 to $60.
Intel's move to its advanced 0.25 micron
production technology, which is currently
underway, will remove some costs, and the rest
will be achieved through eliminating the
secondary cache.
"It will eventually make it to the sub-$1,000
market. It is unclear whether it will do that in
1998," Brookwood said.
Both AMD and Cyrix, he added, will likely be
affected. The two companies currently make
chips on the older Pentium "Socket 7"
architecture. Intel recently adopted a new
architecture called "Slot 1" for the Pentium II that
is incompatible with older computers and circuit
board designs. While a number of analysts have
said that Slot 1 chips can achieve higher clock
speeds, they have also always been more
expensive.
Now, that advantage could be slipping. "They
[Intel] are doing this so people have an upgrade
path to Pentium II," said Brookwood. "In the past,
[AMD and Cyrix] have said, 'We can be lower cost
than Intel because they have to put in all those
cache processors.'"
One question that remains open, however, is how
well the new Pentium II will perform when stripped
of its memory. "There are some programs where
performance will be better than MMX [processors]
and some places where performance could be
abysmal," Brookwood said. The processor could
be challenged by analytical programs, he said,
before adding that users of low-end machines
typically aren't running such programs.
Intel did not comment on the strategy.
Intel is an investor in CNET: The Computer
Network.
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