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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: SC who wrote (56372)	6/1/1998 1:09:00 AM
From: Paul Engel	Read Replies (3) \| Respond to of 186894

Shawn - Re: "...the delay of Merced. I didn't see you say much about the it. Are you taken by surprise and pissed? What's your analysis?" Suprised ? Yes! Pissed? A little. I'm still trying to get better information on the REAL CAUSE of the delay - so at this point in time, I have no concrete reason for the delay. However, it is a good time to remember the following. Intel's early projections for the original Pentium introduction were for June, 1992. This target date was set early on in the project and held firm right up to May/June, 1992. When June, 1992 rolled around, Intel had indeed achieved working silicon on the Pentium - but it was on a BiCMOS process (the BiPolar part was a late addition to the process since the designers early on knew they couldn't hit the speed goals without the Bipolar drivers), with 0.80 micron minimum feature size, had a WHOPPING die size of 268 sq. mm, was manufactured on 6 inch wafers, dissipated an enormous (for that time) 15 to 18 watts at 5 volts Vcc, and if tested carefully could run at 60 MHz and with a little tweaking a few 66 MHz parts could be found. The result - Intel "delayed" the introduction of the Pentium - until April/May, 1993. During the 10 month delay, Intel developed a shrunken 0.6 micron process which ran at 3.3 volts, and brought it up on 8 inch wafers, including a brand new factory in Ireland, redesigned major parts of the chip to incorporate "clock gating" to power down functional circuit blocks when not in use, and added additional APIC (Advanced Programmable Interconnect Circuitry) useful for multiprocessor applications. Net result - Intel was able to offer 60 and 66 Mhz parts (the OLD part) as well as newer 90 Mhz parts (100 MHz parts were also announced) with much lower power dissipation at the "NEW" April introduction date. Today, that delay is barely remembered. However, my guess is that similar concerns are the cause for the Merced delay - whether they be design, software or process. Ultimately, all problems were solved and I suspect that all Merced problems will be worked out in time. Intel's current product pipeline, however, is so full that the current rate of new product introductions is much faster than the market can absorb. New products - with heavy R & D investment - have barely a 6 month lifetime before they obsoleted by Intel's newer products. The Tillamook (0.25 micron Pentium MMX) is a prime example, as is the current Celeron which will be obsolete within a few weeks or months when the Mendocino is introduced. So all in all, this Merced delay is a black spot on Intel's reputation and will have an immediate impact on Intel's stock value - but in the long run, it may lead to a slightly better return on the investments Intel is making in its 32 bit product enhancement products - Xeon, Mendocino, Katmai and Willamette - perhaps extending their production lifetimes. Paul