Intel to roll out new microprocessors

By : |February 27, 2001 0

Duncan Martell

SAN FRANCISCO: Intel Corp., the world’s largest computer chipmaker, will do
its best to build up publicity at this week’s semi-annual conference for its
newest chips. The conference has been held in the backdrop of a sizeable fall in
sales of PCs due to slowing worldwide economies.

Besides seeking extensive publicity for its latest Pentium IV microprocessor,
Intel will also be trotting out new chips for servers, that will serve as the
backbone for corporate networks, and talking about its Itanium processor.

"They’ll be beating the drum as much as they can on the Pentium IV
because that’s supposed to be the basis for much of their salvation this year.
They’re also going to talk about their server processors, mobile solutions and
networking microprocessors," said Needham & Co. analyst Dan Scovel.

Intel said it expects roughly 5,000 developers to attend the Intel Developer
Forum at the San Jose McEnery Convention Center, where chief executive Craig
Barrett will speak about what he calls Intel’s ‘Four Platform and Silicon
Architectures’ that are expected to fuel the company’s growth going forward.

New businesses
Intel in the past few years has invested billions of dollars, either through
buying companies or building up entirely new businesses, to diversify its sales.
Despite this, roughly $25.3 billion or 75 per cent, of Intel’s total business
revenue continues to come from the sale of microprocessors.

Intel plans to take the wraps off its new Pentium III Xeon chip that will run
at 900 megahertz and boast a larger cache or 2 megabytes. Cache is a type of
memory that sits on the chipset very close to the microprocessor to boost its
performance. Yet another new chip for servers, based on the Pentium 4, running
at a speed of 1.4 gigahertz will be showcased. This will be almost twice as fast
as the current fastest Xeon, which runs at 700 megahertz.

Intel, along with other high-tech stalwarts such as Microsoft Corp.,
Hewlett-Packard Co., Dell Computer Corp., Compaq Computer Corp. and the smaller
Apple Computer Inc. were broad-sided last year with a holiday-buying spree
failing to take-off.

Slower revenue growth
This, coupled with slowing economy, has forced Intel to have a re-look at its
first-quarter sales. The company now expects sales to be about 15 per cent lower
than the $8.70 billion that it had in the fourth quarter, far lower than the
typical 5 per cent or so decline that is typically seen.

Despite a perceptible fall in demand, the Calif-based Intel plans to increase
its spending on chip plants and chip-making equipment this year to roughly $7.5
billion and has planned a $4.3 billion-budget for research and development.
Enough indication that the chip giant continues to invest in next-generation
technologies such as larger, dinner-plate-sized silicon wafers and finer line
widths – 0.13 micron – that are etched onto chips.

However, Barrett declined to comment on rumors that Intel’s top brass had
already decided to cut capital spending. "We have given our guidance for
capital spending and there is no public change," he said in response to a
query from a reporter.

(C) Reuters Limited 2001.

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