July 8, 1999 7:15 PM PDT
Intel's Merced chip may slip further
Intel officially denies that Merced has been delayed. But industry sources speculate that there may be a lag--which could put off Merced's release by a few weeks or even months--though that it won't be as significant as the delay Intel imposed last year when it shifted the 64-bit chip's debut from the end of 1999 to mid-2000.
Still, the revised calendar may sap Intel of some psychological momentum and will likely solidify arguments that Merced, the first Intel server and workstation processor designed to compete directly against the most powerful Alpha and UltraSparc processors, will primarily serve as a test vehicle. Customers and computer companies may buy it, but they could hold off on migrating to Intel's 64-bit chips until McKinley, Merced's successor, comes out in late 2001.
"My sources tell me first silicon was originally scheduled for the first of June, and now it's late August, so I think there's been some slippage over there," said Linley Gwennap, senior analyst at Cahners Microdesign Resources.
While customers don't see the so-called first silicon, a delay at that stage pushes other events into the future. A yearlong wait is typical between first chips and first shipping systems even with understood architectures, Gwennap and others say.
"One year from first silicon to first system on a brand new architecture...seems a bit optimistic," Gwennap said, adding that he expects the first systems to arrive in the fourth quarter of 2000.
Intel said it is on track to produce the chips in volume midway through 2000. The first Merced prototypes aren't due for several weeks, but the company remains on schedule to get samples out in mid-1999 and chips into volume production in mid-2000, according to Ron Curry, director of marketing for the IA-64 processor division.
Some people "are taking statements of 'mid' far too literally," he said.
"We're on track for what our [original equipment manufacturers] need to be able to move this thing into production," Curry said. "There have not been any problems with the program since we got past the hiccup last year."
Other sources at Intel, however, added that volume production typically occurs a year after samples arrive, and that systems only start appearing a quarter or more after production.
In May 1998, Intel said it would have to delay Merced from late 1999 to mid-2000. The delays happened because Intel found it harder than expected to develop several aspects of the new architecture concurrently, Curry said.
Intel has eight different operating systems running on simulators of the Merced system, including Windows NT, Linux, and several varieties of Unix.
Merced only a test bed?
Analysts agree that Merced will be used chiefly for debugging IA-64 and putting the new architecture through its paces. The buyers of the high-end servers where IA-64 will initially appear are the most conservative in the industry, they say.
"Merced is going to be like the pace car lap at Indianapolis," said Insight 64 analyst Nathan Brookwood.
Curry acknowledges that Merced "is the initial member of the [IA-64] family," but he said that many computer makers are investing in the architecture for actual use, as well as mere testing.
Though Brookwood hasn't heard about new delays to Merced, he said he had expected Merced to have "taped out" by now--in other words, that the design would be finished and sent off to be manufactured.
But a bigger problem is that Intel faces the issue of developing not just the Merced chip, but also supporting chips and the compiler, the software that translates the programs people write into language understood by the chip. Compilers are always important to chip performance, but they're even more critical to IA-64.
The Merced schedule further diminishes the significance of Merced, the first chip in Intel's plan to bring its dominance to high-end computer systems, putting more pressure on its sequel, McKinley, Gwennap said.
"Had Merced come out sooner, or if it had come out with really killer performance, that would be bad for the [Ultra]Sparcs and the other competitors," Gwennap said. "At this point, everyone is expecting it's going to be late and slow, and the real advance is going to come from McKinley. What this does is puts a lot more pressure on McKinley and for that team to deliver."
Each delay means it's harder for Intel to keep up with Moore's law. "Every time you slip a month, you'd better be adding 4 percent to your performance," Gwennap said. "At some point, they've got to get something out."
Ashok Kumar, an analyst with Piper Jaffray, said the hardware issues with Merced are less significant than the software. "Operating systems are going to be barely ready," he said.
Minor delays to Merced aren't that important in the scheme of things, Brookwood said. "On a multiyear effort like Merced, worrying about two weeks one way or the other is not terribly productive," he said.
However, the effects on Intel's image can be much larger, said Joe Osha, a financial analyst at Merrill Lynch. "Psychologically, it is enormously important. A lot of people investing in Intel are very much focused on whether they can execute this transition," Osha said.
IA-64 is key to Intel's long-term plans to remain profitable by selling more expensive, high-end chips. The popularity of sub-$1,000 computers and the aggressiveness of competitors such as AMD have reversed Intel's historical annual increases in chip sales, Brookwood said. "In order to keep the average above $200, they've got to sell more high-end chips," he said.
Further delays to Merced are possible but may not be significant, said Mark Edelstone of Morgan Stanley Dean Witter. "At this point, most people understand that Merced itself is not going to be a very compelling product for Intel," he said. "If you look at the performance of Merced, it's really not going to be meaningfully different from what you get at the high end of the 32-bit architecture."
Edelstone expects samples of the first Merced chips to arrive in late September at the earliest.
Curry said that manufacturers aren't accusing Intel of being late. "We expect to have samples within a few months to OEMs. That's within their expectations. None of them are walking around saying it's late. As of today, the product has not slipped the schedule," Curry said.