Paul and ALL, Article...Intel looking to Xeon for help...
July 8, 1998
ELECTRONIC BUYERS NEWS: Silicon Valley - To boost falling margins on its desktop microprocessors, Intel Corp. last week formally unveiled the Xeon, a high-priced chip for the workstation and server markets.
While Intel executives have produced numerous benchmarks to promote the Xeon's performance against established RISC competitors, analysts differ on the new chip's influence over OEMs. But they do agree that the Xeon could be Intel's saving grace in the long run.
Furthermore, customers and analysts agree that a recently revealed problem in the way the Xeon interfaces with the accompanying 450NX chipset will not be significant. A revised, tested chip should be available around the middle of the month, according to an Intel spokesman.
"Xeon will enable Intel to extend into the enterprise and technical computing systems, where [the company] has not been before," said John Miner, vice president and general manager of Intel's Enterprise Server Group.
That penetration will take time, but eventually will help offset the declining margins Intel has seen in the mainstream Pentium II segment, observers concluded.
Drew Peck, an analyst at Boston-based Cowen & Co., estimated that Intel could sell about 700,000 Xeon processors this year. "It's a pretty good start," he said. "It's enough so that Intel should have flat margins for the year, rather than facing a precipitous decline."
The Xeon, which replaces the older Pentium Pro, will have less of an effect on RISC-processor competitors than the introduction of Intel's 64-bit Merced in 1999, according to Peck.
Nevertheless, as Intel churns out new speed grades about every six months, workstation-class RISC vendors will lose increasing market share-and funding for future generations of processors-to Intel chips, said Peter ffoulkes, workstation analyst at Dataquest Inc., San Jose.
For the short term, the Xeon's impact will be overshadowed by stronger PC-processor sales as OEMs cut inventory in the second half of the year, according to William J. Milton Jr., an analyst at Brown Brothers Harriman & Co., New York.
Included in Intel's introduction were two versions of the Xeon: a 400- MHz chip with 512 Kbytes of level 2 cache, for $1,124; and a 400-MHz version with 1 Mbyte of cache, for $2,836. Prices reflect 1,000-unit quantities.
In addition to the two 400-MHz processors, Intel released the 440GX, a dual-processor chipset for midrange workstations, and the 450NX chipset, which allows four-way workstations and servers.
The 440GX, which has been formally tested and validated, includes a 2x AGP connection and addresses up to 2 Gbytes of SDRAM for main memory. The 450NX chipset addresses up to 8 Gbytes of EDO main memory, and includes two 32-bit PCI buses or one 64-bit, 33-MHz PCI bus.
In one real-world test, Berkeley, Calif.-based Barra Inc. found that a Xeon did calculations in its financial-service software about 2.1 times faster than a 200-MHz Pentium Pro.
Unannounced Xeon-based chipsets will "definitely" support next-generation Direct Rambus DRAM chips in 1999, according to Raghu Murthi, director of product marketing at Intel's Workstation Products Division in DuPont, Wash.
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