OLD news with some interesting comments..........
nfo4uonly
Mar 19 1998
3:24PM EST
IBM to Make Pentium-class Chips for IDT
Publication Date: Tuesday March 17, 1998
The San Francisco Chronicle
(Copyright 1998)
By David Einstein, Chronicle Staff Writer
Giant IBM has agreed to manufacture Pentium-class processors
for Integrated Device Technology, giving the company a boost
in its bid to become a major supplier of personal computer
chips.
Santa Clara-based IDT is a $537 million company that makes a
variety of chips for computers, communications and networking.
It has aimed the WinChip, its first PC processor, at the fast-
growing market for computers priced below $1,000.
The three-year deal with IBM, to be announced today, will supplement
production of the WinChip, which IDT has been shipping since
December. IBM will start making the chips in the fourth quarter
of this year at its facility in Burlington, Vt.
IDT has no pretensions of challenging Intel, nor even of competing
directly against AMD and National Semiconductor's Cyrix subsidiary.
While those companies go after large and medium-sized computer
makers, IDT plans to target thousands of small manufacturers
and resellers.
"We think there's a great opportunity to establish ourselves
with those folks," said Dave Cote, vice president of marketing
for IDT. He estimated that the company could be shipping 5
million WinChips annually within two years.
Currently, IDT sells the chips to a number of resellers, as
well as to a few small PC makers, including Trigem. It expects
to announce at least one new PC customer within two weeks.
The agreement with IBM should increase IDT's cachet with prospective
customers, analysts said.
IBM also makes Pentium-class chips for Cyrix, and has agreed
to make them for AMD, which turned to Big Blue after failing
to solve production problems.
Cote denied that IDT has suffered similar difficulties at its
new plant in Hillsborough, Ore. "We just want to make sure
we have flexibility to ramp demand if we sign significant
customers," he said. $RYalso said that the agreement "will
give customers a better sense of comfort in knowing that we'll
have product available."
However, analysts said IDT needed more capacity for the new
chips. "Their own manufacturing facilities have been somewhat
limited," said Dean McCarron, a principal with Mercury Research
in Scottsdale, Ariz. "Getting a company like IBM on board
is certainly going to help."
The very fact that IDT has been able to bring a new Pentium-
class chip to market is considered noteworthy. "There are
a number of companies that have attempted to implement these
chips for years and have never delivered anything,"said McCarron.
The WinChip was designed by Centaur Technology, an Austin, Texas,
subsidiary of IDT that was founded in 1995.
Like other Intel rivals, IDT cannot keep up with the speeds
of the latest Pentiums. But its chips are more than powerful
enough for entry-level PCs. The fastest WinChip today runs
at 200 Megahertz, with a 300-MHz version planned for later
this year. Pentiums now run at speeds of 333 MHz and will
hit 400 by year-end.
The new chips are priced at least 25 percent below comparable
Pentiums, giving them an edge with small PC makers and resellers.
Nevertheless, analysts say IDT, along with AMD and Cyrix, could
run into trouble if Intel is able to sway the market to a new,
low-cost Pentium II that should hit the market this summer. |
