Intel sets cruise control on Pentium 4

Intel President and Chief Operating Officer Paul Otellini served notice at the company's recent developer conference that the megahertz era was coming to a close, and the decision Thursday to remove the 4GHz Pentium 4 processor from its road map is clear evidence that Intel has once and for all kicked its speed habit, according to industry analysts.

The remaining single-core chips in Intel's desktop road map will top out at 3.8GHz, falling short of the 4GHz target Otellini promised at the company's financial analyst meeting in November of 2003. The company now plans to increase the performance of its single-core chips by adding cache memory and to enhance the user experience with a number of new features, Intel representatives said. This will have the added benefit of reducing the impact of a short-term chip capacity glut, analysts said.

For years, Intel and rival Advanced Micro Devices (AMD) focused on the clock speed of a processor as the most important indicator of system performance, believing that consumers would have a difficult time trying to understand the other aspects of processor performance. AMD started to emphasize the amount of work its chips do per clock cycle, rather than the actual speed of the chip, as early as 2001. Intel has only recently changed its marketing strategy to accommodate a processor numbering system and increased consumer education about overall performance metrics.

Concerns about the power dissipation of chips at 3GHz and beyond forced Intel away from pushing ever-higher clock speeds. Intel's guidelines for the current Prescott Pentium 4 design specified that the faster chips in the Prescott lineup could consume as much as 115 watts of power under maximum operating conditions. There is a direct relationship between a processor's clock speed and the amount of power it consumes, and a similar relationship between power consumption and the amount of heat given off by a PC.

When faced with speed constraints, adding cache memory is often the easiest way to improve performance, said Dean McCarron, principal analyst with Mercury Research. Cache memory stores frequently accessed data close to the processor, where it can be retrieved more quickly than data stored in the main memory.

The process of increasing the clock speed of chips with a mature architecture is a painstaking exercise of finding bottlenecks in the chip's pathways and making subtle changes to enable the higher frequency, McCarron said. This is not especially challenging, but takes up time that could be spent working on more fruitful designs, he said.

A 3.8GHz Pentium 4 processor with 2M bytes of cache will probably outperform a 4GHz processor with 1M-byte of cache, and it will be significantly easier to produce in large volumes, McCarron said.

"If we want more performance, what do we do? Cache is the easy one, redoing circuit pathways is hard. Tie that in with the extra capacity, and you've got a very logical business decision," McCarron said.

Intel Chief Financial Officer Andy Bryant warned investors on Tuesday that Intel would take an under-utilization charge in its fourth fiscal quarter, now underway. The company's factories are not running at full capacity because of a weaker than expected PC market and better than expected results from Intel's new 90 nanometer process technology, he said.

One way to take advantage of excess capacity is to make larger chips, which conveniently enough is the result when additional cache memory transistors are placed on a chip, said Kevin Krewell, editor in chief of the Microprocessor Report.

Chipmakers usually try to keep their mass-market processors as small as possible, he said. Chips are cut from silicon wafers and larger chips mean fewer products can be garnered from a single wafer, increasing the overall cost to manufacture a single chip.

Now with larger chips, Intel will need to produce more silicon wafers to meet market demand, Krewell said. This spreads the company's manufacturing costs over a larger number of chips and helps stabilize Intel's margins, something the Wall Street financial community is always worried about, he said.

Users will benefit not only from the additional performance, but the silicon technologies that Intel will bring to market over the next year, analysts said. By the second quarter of 2005, Intel plans to introduce many of the processor features it has so far referred to as the "Ts," which include features such as multiple virtual PC environments, hardware-based security features, and manageability technology, the company said Thursday.

Some of these technologies, such as the VT virtualization feature and the LT security feature, will require software to let users take advantage of those capabilities, Krewell said. For example, VT will allow users to run different operating environments on a single PC, but that's not possible unless that PC's operating system has been designed with that capability, he said.

Otellini told attendees at the Fall Intel Developer Forum in September that Intel won't activate the VT and LT features until Microsoft releases the Longhorn operating system, which as of Thursday was scheduled for 2006. Intel has built several technologies into recent products like hyperthreading and 64-bit extensions that were disabled until software was available to take advantage of those capabilities.

Intel hopes the move away from speed-based designs will help it regain some of the luster it has lost during an embarrassing year of product delays, manufacturing glitches, and face-saving road map decisions. The company that has provided the engine for high-tech industry growth for so many years is no longer automatically seen as the most innovative player in chip design by many analysts and IT managers.

AMD proved that Intel underestimated demand for 64-bit extensions to the x86 architecture, at least in servers. Companies like IBM and Sun Microsystems are already shipping dual-core chips, and AMD has already demonstrated a dual-core version of its Opteron chip. Intel's Itanium 2 processor continues to fall far short of the sales targets once promised for that powerful server chip. Texas Instruments has held Intel at bay in the mobile phone and personal digital assistant markets.

However, Intel still has the most formidable manufacturing resources in the industry, especially after Chief Executive Officer Craig Barrett's decision to invest heavily in new factories during the last downturn. Chips with larger cache memory will help the company take advantage of those resources, and Intel's growing market share in chipsets and motherboards will help it introduce its "T" platform features to a wide range of customers, McCarron said.

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