BillyG,
(Further) reasons to be cheerful... Intel's competitiveness to be based on .25:
Intel prepares low-cost Pentium II
By James Niccolai
InfoWorld Electric
Posted at 6:15 PM PT, Nov 4, 1997
Intel is preparing a slimmed-down version of its Pentium II processor that it will use to strengthen its position in the market for low-cost PCs, an analyst said Tuesday.
The new chip, which is being prepared for release in late 1998, could undercut similar offerings from Advanced Micro Devices and Cyrix, according to Nathan Brookwood, an analyst at Dataquest, in San Jose, Calif.
Intel will reduce the cost of its Pentium II by removing the Level 2 (L2) cache, an "optional" memory component that speeds up the rate at which data can be fed to the processor, thus improving its overall performance.
Intel confirmed its plans to bring the cost of the Pentium II down but would not say how or when it will go about it.
"You can expect that we'll take the Pentium II and make it competitive at all price points, but how we'll do it we won't say," said Intel spokesman Chuck Malloy.
Intel's L2 cache comes from four discrete cache chips it buys from third-party vendors and packages with the Pentium II, and amounts to 512KB of additional memory. Removing the cache chips could reduce manufacturing costs of a single processor from about $100 to about $80, Brookwood said.
Intel presently sells its Pentium IIs to systems manufacturers starting at about $350, Brookwood said. In order to penetrate the sub-$1,000 PC market with them, it needs to sell them for around $100, which would mean reducing their manufacturing costs by about half.
When Intel switches to its advanced 0.25-micron production technology this year, its manufacturing costs will be reduced further, said Linley Gwennap, editor in chief of The Microprocessor Report, in Sunnyvale, Calif.
All this could be bad news for smaller chip makers such as AMD and Cyrix, Brookwood and Gwennap said.
Besides reducing the cost of the Pentium IIs, Intel would also be introducing a new architecture into the low-end PC market. Intel currently targets the low-end market with its MMX-enabled Pentiums, which share the same Socket 7 architecture used by AMD and Cyrix.
But the Pentium II uses Intel's recently introduced Slot 1 architecture, which is incompatible with Socket 7 processors. Since both chips will not fit into the same motherboard, systems makers may be forced to choose between the two, Brookwood said.
"There's been this fantasy that Intel was going to have to maintain Socket 7 for the low-cost design, and I think [developing a low-cost Pentium II] makes it clear Intel has no intention of maintaining Socket 7 for the low end," Gwennap said.
If Intel can eliminate L2 cache chips, it will be able to offer a low-cost solution, Brookwood said.
"When Cyrix and AMD decided to go up against Intel, they were basically signing up to fight this on a continuing basis," Brookwood said. "Any time they get tired, they can drop out. I'm sure Intel won't mind a bit."
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Note:
"All this could be bad news for smaller chip makers such as AMD and Cyrix, Brookwood and Gwennap said."
Read: Tool up or die! And don't dally.
I backed up the truck to Cymer (again) yesterday.
Best Regards,
--PD |
