Intel to produce cheap .25 Pentium II:
Intel May Attack Low-End Consumer Market
(11/03/97; 3:05 p.m. EST)
By Mark Hachman, Electronic Buyers' News
Intel this week plans to attack the low-end consumer market
with a stripped-down Pentium II module, EBN has learned.
Intel is expected to unveil a low-cost Pentium II built upon the
Slot 1 interface that eliminates the cache SRAM SRAM from
the Pentium II module, according to Charles Boucher, a San
Francisco-based analyst for UBS Securities Equity Research.
Intel has completed the first round of non-disclosure briefings
to financial and industry analysts. The first processors to
appear in this form factor will likely be of the 0.25-micron
Deschutes generation, according to Nathan Brookwood,
microprocessor analyst at Dataquest.
"However, by the introduction of Deschutes, the low end
might well be 300 MHz," Brookwood said. The new Pentium II
will eliminate the cache SRAM and "some of the costly
mechanical components" to bring the Pentium II subsystem
cost down to levels that are compatible with PC system price
points in the $1,000 to $2,000 range, Boucher wrote. The chip
would use the Slot 1 interface currently used by the Pentium II.
Eliminating the Level 2 cache will result in lowered
performance: However, this shouldn't be a concern for OEMs,
Brookwood said. In fact, in multimedia applications, the
on-chip Level 1 cache can still hold the necessary instructions
for processing, while the data typically overflows the cache in
any event.
"The low-end of the PC market is characterized by features and
price, not performance," Brookwood said. "If an OEM can offer
Slot 1 and AGP [graphics], who cares what the actual
performance is?"
In downgrading Intel's stock rating from "buy" to "hold",
Boucher raised concerns about the dilution of Intel ASPs
caused by Intel's revised product focus, as well as the
lower-than-expected price cuts on its processor lineup. These
factors, combined with a lack of improvement in PC and
motherboard build rates, should pressure Intel's gross margins
downwards, Boucher reported.
On the other hand, Intel's strategy simply allows Intel to
bundle the same processor die with varying amounts of cache
-- in incompatible form factors, Brookwood said.
"Essentially, Intel can take a stripped-down Pentium II and sell
it in the $100 price range," Brookwood said. "They can then
add a large amount of cache, and sell it for higher prices." For
example, the Pentium Pro with 1 megabyte of cache sells for
nearly $3,000, Brookwood added.
Note: the Deschutes is still made as far as I know with a
mercury-lamp powered .25 micron stepper---but this should be
changing.
--PD |
