Today's Wall Street Journal has an article on INTEL and its CPU competitors AMD, CYRIX and IDTI. Here is the article
The Wall Street Journal -- October 21, 1997
Industry Focus:
Intel's Chip Innovations Could Scramble PC Industry
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Rivals Fight Design Changes That May Lead to Confusing Proliferation
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By Dean Takahashi
Staff Reporter of The Wall Street Journal
SAN JOSE, Calif. -- After years of stability, the
fundamental design of personal computers
suddenly seems headed for fragmentation. PC
buyers and competitors of Intel Corp. have
reason to worry.
Intel, the kingpin of chip makers, is pushing a
series of improvements to PC technology that
also happen to make life difficult for companies
that clone Intel's products. As smaller rivals try
to resist those changes, industry executives say
the likely outcome is a proliferation of PC
models with confusing differences in power and
price.
The latest standards wars, which will be watched
closely by the Federal Trade Commission in its
antitrust investigation of Intel, were evident at
last week's Microprocessor Forum in San Jose,
Calif., an event dedicated to discussion of
breakthroughs in chip design. This year, much of
the hallway discussion was dominated by Intel's
maneuvers regarding the so-called bus circuitry
that moves data through a computer, as well as
the proprietary technology it is developing to
handle three-dimensional media. Intel
competitors Advanced Micro Devices Inc.,
Cyrix Corp. and Integrated Device Technology
Inc. discussed their own plans to outflank the
giant.
If conflicting technologies take hold, analysts
say, consumers will be left with bewildering
claims about new PC features. Software
companies also face the potential headache of
tailoring products for different hardware
alternatives. "We would prefer that they get
together on this," says Carl Stork, general
manager of Microsoft Corp.'s Windows division.
Intel has reason to be hard-nosed. Because of
competition, and the proliferation of computers
costing less than $1,000, the Santa Clara, Calif.,
company has had to cut chip prices much faster
than usual. It stunned analysts last week by
forecasting only slight sales growth in the fourth
quarter and missed third-quarter earnings
expectations.
So the company is eager to move the market to
the Pentium II, a faster chip that has another key
difference: It fits into PC circuit boards in a new
way. For years, makers of rival microprocessors
could be sure that their products plugged into a
standard chip socket that is the same as Intel's.
Computer makers wouldn't have to design
boards specially for competing chips, making it
less expensive to use their products.
That all changed with what Intel calls Slot 1, a
patented, proprietary slot that allows a cartridge
containing the Pentium II to plug into a
computer's main board. Intel says it introduced
the technology because of traffic jams for data
on the bus that connects microprocessors with
other parts of a machine. By diverting some
traffic to an alternate route into secondary
memory chips, Intel says its new Slot 1 bus can
relieve traffic on the main highway. Intel also
announced a faster proprietary connection called
Slot 2.
Competitors compare the moves to International
Business Machines Corp.'s failed attempt to
close off the PC clone market in the late 1980s
with a bus design called Micro Channel. They
are lobbying computer makers to keep using
standard sockets with their Pentium clones as
long as possible, using the argument that it is in
those companies' interest not to become even
more beholden to Intel.
"In the absence of open standards and
competition, consumers will pay a monopolist's
tax," said W.J. "Jerry" Sanders III, chief
executive officer of Advanced Micro Devices,
during a speech at the forum. "AMD is here to
cut your taxes."
Intel's competitors are betting, for one thing, that
the costs of engineering for Slot 1 will slow the
use of the Pentium II in the hot market for PCs
under $1,000. But most major PC makers
already have added Pentium II-based desktop
computers to their lines, and Intel will drum up
demand with a $100 million Pentium II
advertising campaign in the fourth quarter. So
the alternative chip makers are also readying
ways to cope if Slot 1 becomes dominant. They
are also diverting precious research money into
computer technologies other than
microprocessors, as well as striking alliances
with important motherboard and chip-set
manufacturers.
Mr. Sanders tipped his hand last week that
AMD's K7 chip, planned for launch in 1999, will
fit in a cartridge that plugs into Intel's Slot 1
using bus technology developed by Digital
Equipment Corp. Cyrix hopes it can dodge the
issue through its pending acquisition by National
Semiconductor Corp. National Semiconductor
believes a patent cross-license with Intel will
give it rights to use Slot 1.
The clone makers also must contend with Intel's
changes on another front -- technology for
processing multimedia data such as voice, sound
and video. They were able to match Intel's
earlier development in the field when Intel
allowed them to clone an initial technology,
called MMX, that they included in their own
chips. But Intel is now working on another
advance, dubbed MMX2, that adds
three-dimensional graphics capability. And
though an Intel spokesman says the release of
future multimedia technologies will follow the
pattern of MMX, competitors think Intel might
keep the technology to itself.
So the alternative camp has been working on
3-D technology that isn't compatible with
anything Intel will offer. AMD, Cyrix and
Centaur Technology Inc., a unit of Integrated
Device, were so intent on moving fast and
secretly that they didn't bother to integrate their
developments with one another, leaving the
possibility of confusing differences in
performance and ratings on future PCs. "None of
the alternative companies intended to fragment
the market, but that is going to be the result,"
says Michael Slater, principal analyst at market
researcher Micro Design Resources Inc. in
Sebastopol, Calif.
Of course, fragmentation also could be avoided
if Intel merely steamrolls the market into
accepting its technology.
The clone makers' ultimate challenge may be
coping with Intel's plan, in a joint venture with
Hewlett-Packard Co., to introduce a new
proprietary branch in computing's evolution, a
novel chip design called Merced. The design
includes a change in the fundamental
instructions that tell microprocessors what to do.
The idea is to allow computers to do many more
things simultaneously.
The new instruction set, described publicly for
the first time last week, will arrive initially in
high-end computers in 1999, but Intel's product
roadmap doesn't show it arriving in desktop
machines until after 2003. Until then, the
company also will keep introducing new chips
based on its existing instruction set.
Because of Merced's complexity, cloners will
have a tough time duplicating the Merced chip
and its compatibility with previous Intel chips.
But with the Federal Trade Commission
currently investigating Intel, some industry
executives think the company may tread lightly
in withholding key Merced technology from
competitors.
"We don't think Merced will be an issue for the
desktop until well into the next decade," said
Steve Tobak, corporate-marketing vice president
at Cyrix. "If Intel focuses only on the high end,
we have the chance to become the mainstream
solution."
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What Chip Companies Are Fighting Over
BUSES
A bus is a data highway in a computer. Intel's
Pentium II chip comes in a cartridge with a
faster bus and a proprietary slot to connect it to a
computer. Competitors use an older socket
standard for plugging in their chips.
MULTIMEDIA EXTENSIONS
New computer instructions, such as Intel's MMX
technology, make it easier to process sound,
video and graphics data. Intel hasn't shared its
successor technology; competitors are
developing alternatives.
NOTEBOOK COMPUTERS
Intel is putting its chips onto cartridges that plug
into a laptop's main system board. Competitors
will have to develop their own modules and chip
packages.
INSTRUCTION SETS
Intel and Hewlett-Packard have developed a set
of instructions for a new computer architecture
called IA-64, expected in 1999. Competitors
aren't likely to come up with easy alternatives.
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