New Intel, AMD chips coming soon

Faster versions of existing chip families from Intel and Advanced Micro Devices (AMD) will be released over the next two weeks, setting the stage for next-generation releases by the end of this year and into 2003. Intel's 2.8GHz Pentium 4 chip is already for sale on industry price guide Pricewatch.com for US$578, with an estimated release of Aug. 26. Three other Pentium 4 chips at 2.66GHz, 2.6GHz, and 2.5GHz are available on UpgradeSource.com for sale now.

The 2.8GHz Pentium 4 had originally been scheduled for an October release, but was moved up to Aug. 25, according to a research note distributed by a Salomon Smith Barney Holdings Inc. analyst last month. At the time, Intel declined to confirm that date, but did say the chip would be announced in the third quarter. The research note also said Intel would cut the prices of existing processors, including its current top-of-the-line 2.53GHz Pentium 4. The prices of AMD's Athlon XP processors have declined sharply over the last week on various price-guide Web sites, usually an indication that a chip maker is set to release new products. AMD also cut prices for its processors across the board in late July. A call to Intel was not immediately returned. An AMD spokesman said it is company policy not to comment on unannounced products.

"Intel has been pretty vocal about pulling in the schedule for their faster Pentium 4s," said Nathan Brookwood, principal analyst with Insight 64 in Saratoga, California. "The bigger they can make the gap between the installed base and what is available, the more pressure will be placed on customers to upgrade," he said. Many customers are still using the PCs they bought in 1999 when they anticipated year 2000 software problems, and are running 400MHz to 500MHz processors, he said.

AMD will release their Athlon XP 2400+ and 2600+ chips this week, according to various reports. The latest Athlon chips run at slower clock speeds than the newest Intel chips, but the performance gap between the chips is not as wide as the clock speed gap, Brookwood said.

The battle for high-end performance dominates the headlines and online message boards, but the real competition is at the midrange level, where most buyers are looking for the most performance they can afford, Brookwood said. Most desktop systems today are priced between $800 and $1,200, with Intel's 2.2GHz and 2.0GHz Pentium 4 chips. AMD's Athlon XP 2200+ and 2000+ can clearly match the performance of those chips, he said, and according to Pricewatch.com, at a lower cost.

"This is the push for dominance during the fall selling season," said Bert McComas, founder and principal analyst at InQuest Market Research in Highly, Arizona, referring to autumn. "As long as you have the infrastructure in place to deliver the platform in scalable volumes, now is the time to make news at the component level."

Intel maintains a healthy lead in the race for processor market share, according to research for the second quarter of 2002 from IDC. Intel's 82.8 percent share in terms of shipments dwarfs AMD's 15.6 percent, and the gap widened in the second quarter. The release of faster processors from existing families whets hardware fans' appetites until the main courses appear around the end of this year, or beginning of next. This incremental game has been going on for some time between the two main chip vendors, countering each other on clock speed advances, price cuts, and technology breakthroughs.

Chips based on AMD's Hammer technology are expected at the end of 2002, and the company promises its 64-bit desktop processors will allow it to take market share from Intel.

Intel's Prescott, a Pentium 4 chip manufactured on the company's new 90-nanometer technology, will be out in the second half of next year, and could scale past the Hammer technology.

"Intel and AMD have been striving for a competitive advantage on performance, and there's no end in sight. It benefits the buyer, and makes the market more interesting," Brookwood said.

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