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To: Jules B. Garfunkel who wrote (46972)2/2/1998 5:27:00 PM
From: Joey Smith  Read Replies (1) | Respond to of 186894
 
All: Very Interesting article on Merced vs. Alpha. Let the battles begin...

joey

Digital Attacks -- And Compaq Adopts
-- Intel's Merced
(02/02/98; 3:26 p.m. EST)
By Anthony Cataldo and Rick Boyd-Merritt, EE Times

Digital Equipment's Alpha
microprocessor division is preparing
to come out with its answer to Intel's
Merced at a time when Alpha's fate is
clouded in the wake of Compaq's
announced plan to acquire Digital.
The company is expected to detail
significant new Alpha products on
Monday, possibly including plans to
take the processor to speeds of 1 GHz.
However, Compaq publicly sketched
a road map last week that shows no
role for RISC processors in its future
high-end systems. The Houston PC
maker separately disclosed it is
already working with a new design
group at Intel to build Merced-based
servers.

Digital , in Maynard, Mass., is
expected to announce soon
availability of its next-generation
0.35-micron 21264 processors
running at 400 MHz to 433 MHz, a
device the company says will provide
twice the performance as the current
21164. To get such a performance
boost, the chip will use out-of-order
execution and double the size of the
cache memory, with a bandwidth
rating of 8 gigabytes per second. The
Level 2 cache will run as fast as 5 GB
per second, according to Y.J. Kim,
associate director of Alpha processor
marketing at Samsung Semiconductor,
in San Jose, Calif.

The devices, which will start selling
in sample quantities in the second
quarter, will top off at 600 MHz, Kim
said. By the third quarter, Samsung,
the leading Alpha licensee, plans to
shift the product line to its
0.25-micron process. That will drive
processor speeds past 800 MHz.

"In the next 18 or 24 months, the 264
can go to 1 GHz and 100-SPECint,"
Kim said.

Samsung is betting big it can tap a new
market through Alpha. Beset by
DRAM price drops and a faltering
economy in South Korea, the company
said it is hoping Alpha will lead the
way to more logic sales to bolster
semiconductor revenues.

Samsung said it hopes to get an early
lead over Intel's forthcoming Merced
processor by offering Alpha chips
with comparable or better
performance than any X86
competitior.

Kim said the decision by Advanced
Micro Devices, in Sunnyvale, Calif.,
to use the Alpha EV6 bus for its
next-generation K7 processor will
provide OEMs with pin-compatible
devices across the performance range.
The result will be to make Alpha
systems more affordable by taking
advantage of lower-cost motherboards
for the K7.

"We want to provide the 21264 and
the K7 as the new standard," Kim
said. "There's opportunity to do joint
marketing."

One Brick At A Time
The Alpha push comes in the wake of
Compaq's agreement to purchase
Digital for an estimated $9.6 billion.
Following the merger announcement,
Compaq detailed what it called its
Enterprise 2000 platform in a London
news conference. The platform
amounts to a road map based on four-
and eight-way SMP Pentium II and
Merced systems working in tightly
linked clusters or system-area
networks.

Asked whether the company's
high-end servers would be based
exclusively on X86 CPUs, Mike
Perez, vice president of the server
products division, said, "Absolutely.
Our play is to leverage high-volume
building blocks, building a mainframe
one brick at a time. For us, Merced is
just a bigger, better node."

Emphasizing its commitment to just
such a path, Intel last month quietly
acquired the 60-person NCR design
team that had developed the Octascale
technology for eight-way SMP
Pentium Pro systems. According to
several sources, the Columbia, S.C.,
group has already started work on an
eight-way SMP system based on
Merced. Last year, Intel acquired
Corollary of Irvine, Calif., which is
crafting ASICs for an eight-way
system using a 450-MHz version of
Intel's Deschutes processor, which is
expected to ship later this year.

"Since product-development cycles
for these kinds of systems are
sometimes longer than the product
cycles themselves, Intel had to break
away to parallel development, just as
they do with processor generations,"
said a source close to the design team.
"The word is they are being pulled
into the Corollary stuff awfully
quickly."

Compaq, which is supplying 64-bit,
66-MHz PCI silicon in cooperation
with the Corollary project, expects to
strike a "similar agreement" to work
with Intel's new Merced server team.
"We are in the middle of that," Perez
said.

Perez would not comment specifically
on Compaq's plans for Alpha, but he
did indicate that the MIPS architecture
of the high-end systems of Tandem
Computer, in Cupertino, Calif., which
Compaq acquired last year, will
ultimately make the transition to the
X86.

"The [Tandem] trajectory is to move
to Intel and high-volume platforms, but
they are committed to a couple more
generations of the MIPS architecture,"
Perez said.

Technology Under Attack
Indeed, Compaq's acquisition of
Digital is being seen as a sign that the
high-end RISC/Unix server world is
under accelerated assault from the PC
architecture in the form of clusters of
Merced-based SMP systems.

The acquisition of the NCR design
team "underscores Intel's seriousness
about this part of the market," said Jim
Pike, who heads that group. Pike
refused to comment on Intel's specific
plans.

Ironically, Digital was the largest
OEM of NCR's Octascale systems,
which Pike helped design. Sequent
Computer of Beaverton, Ore., also
uses the Octascale technology in some
of its systems.

Intel's acquisition of the NCR group
leaves only one independent designer
of X86 SMP systems, Axil Computer,
in Billerica, Mass. Axil's CEO, Jerry
Talbot, said despite that it must now
compete head-to-head with Intel, Axil
expects to deliver competitive eight-
and 16-way Deschutes and Merced
servers. Axil's technology is used in
servers from Data General and
Hewlett-Packard.

Axil has "done some preliminary
work on eight- and 16-way Merced
designs," Talbot said. "We are quite
confident we can follow our
architecture through to the Merced
generation.

"Designing these ASICs is a
complicated job," he added. "The core
development has to do with writing a
very complex piece of code.
Throwing some more people at the job
doesn't make it happen sooner."



To: Jules B. Garfunkel who wrote (46972)2/3/1998 2:46:00 PM
From: Reginald Middleton  Read Replies (1) | Respond to of 186894
 
To: Jules B. Garfunkel
From: Reginald Middleton Tuesday, Feb 3 1998 2:44PM EST

<Go back to Forbes and ask them to explain exactly where they see Intel's accounting practices as "aggressive". I've always, along with most other analysts, considered Intel's accounting practices as "conservative". If Forbes wants to do a story on aggressive acoounting practices, I suggest they look at IBM over the last 18 months.>

When stripped of its accrual accounting measures and observed on a purely economic basis, IBM's numbers (in terms of actual economic profit) look like this over the last three years:

Book Economic Profit (from an operating standpoint)
1994 1995 1996
Return on Invested Capital 0% 6% 2%
Cost of Capital (WACC) 11% 11% 11%

Spread -11% -5% -9%

I rushed through the cost of capital, but I am sure you get the message. You have been asking me review IBM for quuite some time now. If you go to rcmfinancial.com and download the model and database (a high speed connection is required) you can slice and dice IBM using my economic methods (and help me debug the app:-).

The economic performance of IBM shows why the CEO has aggressively bought back the stock, he didn't have anything better to do with the shareholder's money on a risk adjusted basis. This is a big negative due to the fact that IBM sits in the middle of a hypergrowth industry going through a tornado-like paradigm shift.