Fred, I hate to disturb a great party. But I believe this article deserves a careful read.
A sneak preview of the FTC's case against Intel
November 25, 1998
ELECTRONIC BUYERS NEWS via NewsEdge Corporation : Intel Corp.'s disclosure of its microprocessor roadmaps comes at a time when the processor has taken a back seat to the supporting core logic.
Integration is the new watchword, and no other PC component holds as much potential for integration as the chipset. But integration is a two-edged sword: With several functions combined into one chip, buyers benefit from lower prices-yet an end user who buys that PC may be unable to upgrade those individual functions.
One of the higher-profile examples of integration is Intel's low-cost Whitney chipset, which integrates the i740 graphics chip. OEMs say it will ship in early 1999.
By chance or by design, Intel's i740 has established a new baseline for 3D quality: A competitor must either outperform it, or risk being sucked into a maelstrom of declining prices as Intel's fabs produce still more chips.
Likewise, the Whitney's role seems to threaten end-of-life chips, such as Cirrus Logic's nearly defunct Laguna3D, which sold extremely well into corporate systems as recently as the second quarter of this year. Faced with a choice between the Whitney and the Laguna3D, even Cirrus executives told me they would choose the Whitney.
Of course, the government has restricted its investigation into whether Intel strong-armed three OEMs that own their own chip technology. An inquiry into Intel's broader influence in the PC industry is reportedly not part of the case that the FTC will present in February 1999.
So does the Whitney harm competition, as some reports would have it? I don't think so. If it does, then government regulators should also examine Via Technologies, Acer Labs, and Silicon Integrated Systems, all Taiwanese chipset makers that have or promise core logic with integrated 3D functions. I don't believe antitrust laws can be applied to a group of competitors.
But the FTC might find more damaging material in the Camino, Intel's higher-performance chipset, which is expected to be available in mid-1999. The Camino integrates the digital audio control logic based on the AC '97 specification that Intel authored with support from other industry vendors. Does that integration help eliminate the need for discrete PC audio chips? I believe so. Does this unfairly hurt those vendors? That's a bit more difficult.
Open standards generally produce commodity products that in turn can become integrated, while differentiation breeds survival. Before long, basic 3D will be added to the list of cheap IP cores. But architecting any standard means an advantage in time-to-market as well as insight into that market's evolution.
As both the PC and set-top box become standardized, integration will take hold further. What the government needs to establish is that Intel has unfairly steered this trend to its advantage.
By Mark Hachman
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