The story of MERCED being late seems rediculus.
Are these news guys saying that since Intel had said Merced samples for Mid-99 that August is not consistant with that statement from months ago? This seems a little like hair splitting to me. Perhaps a slow news day. Or is first silicon not coming out in August? Is there any news here?
Intel Says Merced Prototype
Is a Month Behind Schedule
By JOHANNA BENNETT
Dow Jones Newswires
NEW YORK -- Prototypes of Intel Corp.'s Merced chip may not see daylight until August, almost a month behind schedule, according to an analyst.
Linley Gwennap, senior analyst for Cahners MicroDesign Resources, said that while Intel is making "good headway," it may be late August before lab samples of its new 64-bit computer chip are completed and ready for testing.
Company Profile: Intel
The delay would mark the second time the semiconductor giant has fallen behind in its bid to develop its first server and workstation processor designed to compete with products by Sun Microsystems Inc. and the former Digital Technologies.
Intel had expected lab samples to be ready in mid-1999.
Other analysts downplayed the significance of a delay. "It's a non-event," said Ashok Kumar, an analyst for U.S. Bancorp Piper Jaffray.
A spokesperson for Intel was not immediately available for comment.
Last spring, Intel's announcement of a six-month delay in Merced's rollout was greeted with a more negative reaction. Volume production was slated to start in late 1999, but was put off until mid-2000 due to difficulties in developing the architecture.
Analysts agreed that slips in Merced's development schedule are to be expected due to the complexity of the chip's technology. Theoretically, a delay in completion of lab samples -- also known as first silicon -- could push back the start of volume production. But whether that will happen is hard to say, Mr. Gwennap said.
"They have a year to work on accelerating things," he said. "Intel says that volume production will begin mid-2000. I am a little bit more conservative. They have already had problems, so I think it might be sometime in the second half of the year."
Despite the hoopla surrounding its development, Merced will have little financial impact on Intel, analysts said. The chip is a milestone because it is the first time Intel has built a semiconductor using IA-64 technology. But with Merced's successor, known as McKinley, slated to debut in late 2001, Merced holds little financial importance for the chip maker.
Merced isn't expected to generate much revenue or volume once in the market place. Rather the chip will be used largely to debug IA-64 and acclimate customers to the new architecture, analysts said.
"In the grand scheme of things, whether the thing goes out in the third quarter or the fourth quarter [of 2000] doesn't really make a difference," said Brown Brothers Harriman analyst Bill Milton. "It is not as if Intel's earnings will go down."
"If it has slipped, I don't think it will be a big deal," said Morgan Stanley Dean Witter analyst Mark Edelstone. "Merced is not perceived as a chip that will drive a lot of volume for Intel. That will be accomplished by the second generation -- the McKinley."
Merced's development has been highly publicized and anticipated. And while more pressure is being placed on the McKinley chip's performance, investors are keeping an eye on Merced's progress. While there will not be any immediate financial repercussions -- Merced won't produce revenues until 2001 -- a delay could prove harmful to Intel's image, analysts said. If Merced's debut does end up being pushed back, even by a few weeks, Intel won't escape unscathed.
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