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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Estephen who wrote (61575)	11/20/2000 12:23:08 PM
From: Estephen	Read Replies (1) \| Respond to of 93625

Intel Unveils Pentium 4, Says Slowing Demand May Aid Production By Cesca Antonelli Santa Clara, California, Nov. 20 (Bloomberg) -- Intel Corp. began selling its long-awaited Pentium 4 processor, and executives said slowing demand for personal computers could actually work to the No. 1 chipmaker's advantage for a change. Intel today officially unveiled the Pentium 4, the latest in its best-selling product line. A 1.4-gigahertz device sells for $644, with a 1.5GHz version at $819 each in volume quantities. Analysts have long said Pentium 4 would become an important weapon against increasingly competitive chips from Advanced Micro Devices Inc. As concern over slack demand for PCs mounts, the very forces that hurt Intel earlier could help Pentium 4 win acceptance and speed plans for volume production. Intel now has capacity free for the new chips, and memory-chipmakers may be more willing to build the specialized chips Intel needs, Executive Vice President Paul Otellini said. Analysts agreed. ``More and more, (Pentium 4) is looking bigger and bigger for next year,'' said Mercury Research analyst Mike Feibus. ``Things are coming together.'' Intel had warned PC makers that though the Pentium 4 would offer hefty performance increases, it would be bigger and more expensive than its best Pentium IIIs. The Santa Clara, California- based chipmaker said it would only be able to offer the chips for expensive PCs at first. That's all still true. The theory now is that lower sales this year and slower growth in 2001 means Intel could ship large quantities of Pentium 4s sooner than expected and speed up plans for less expensive ones that could reach more consumers. Capacity Snafu Demand for chips skyrocketed this year as consumers and businesses flocked to the Internet, stretching Intel's capacity to the limit. As the company faltered, AMD gained customers because its bigger rival couldn't increase production fast enough. That's no longer the case. As demand wanes, space opens -- in effect, adding capacity for Pentium 4, Otellini said. Because AMD has been so successful, Intel must lower the costs of the Pentium 4 quickly -- so it can go in more mainstream desktops sooner. Analysts said the chip will only appear in the most expensive PCs, costing about $3,000, this quarter and possibly the next one. ``That's a very narrow market,'' Insight 64 analyst Nathan Brookwood said. ``If Intel can drive to higher volumes and clock rates, that will give them some advantage.'' Intel plans to boost the speed to 2GHz by the third quarter of next year. AMD's flagship Athlon operates as fast as 1.2GHz. Rambus Questions Slowing demand may also help head off another problem. Intel has come under fire for choosing a new memory design from Rambus Inc. to work with the Pentium 4. PC makers complain Rambus is more expensive, and some memory-chip producers have balked because it costs more to build. That could have meant big trouble. Analysts and executives earlier this year had predicted a shortage of dynamic random access memories, the main memory chips in PCs. Prices soared, limiting the appeal of using capacity for Rambus. DRAM prices have fallen more than 50 percent in the past three months as demand slid. That makes it more likely that Intel will get the level of memory support it needs, analysts said. ``Suddenly, Samsung is happy to fill its capacity with anything, and suddenly, anything mean Rambus,'' Feibus said. Otellini, who runs the computer-processor group, said falling DRAM prices make Rambus ``more attractive'' for memory makers. Slow Start Pentium 4 will still start slow. Feibus expects less than 500,000 units to ship this year. Though he said Intel will beat his earlier projections for 14.5 million units in 2001, it won't approach the 60 million desktop Pentium IIIs he expects to sell this year. Otellini said Pentium 4 unit sales will top Pentium III in early 2002 and that the company hopes to accelerate that timeline. Manufacturers including Dell Computer Corp., Hewlett-Packard Co. and International Business Machines Corp. showcased PCs based on the Pentium 4 at the Comdex trade show last week. Those companies and others will introduce systems with the chip within the next month, Otellini said. quote.bloomberg.com