September 27, 1999 5:55 PM PDT
Intel delays chipset as Rambus falls further
Intel delayed the release of its 820 chipset, which is the component that will allow Intel processors to "speak" to Rambus memory, because of technical problems.
Rambus stock took another hit on the news, dropping 12 to close at 59.06 this afternoon. The company's stock has been declining rapidly since CNET News.com first reported the chipset problems last week.
The problems occur when all three of the memory slots on a Rambus motherboard are filled, said an Intel spokesman. Intel is still in the process of identifying the exact nature of the problem, and the company does not have a tentative release date for the chipset, he said.
In a statement this morning, Rambus identified the problem as affecting some computers with three memory slots, "relating to the combination of the memory system components, module configurations, and motherboard design."
PC manufacturers said the problem would appear to be with the third memory slot, which can cause the corruption or loss of data. Compaq Computer discovered the flaws and reported them to Intel about a month ago, sources said.
A Rambus executive said the problem came about because of time and technology constraints.
"You have to put this in perspective," said Dave Mooring, Rambus senior vice president. "This [technology] has been coming for many years, and this is the last bump before escape velocity."
"We, with our partners, designed a very robust system with a huge amount of flexibility--three connectors and lots of different module sizes. In retrospect, we probably allowed way too many configurations for our customers, because it makes for a lot more work on the back end," he said.
"And we just plain ran out of time before we announced with our partners, bringing the configurations to the level of validation that's required with a new memory technology," Mooring said. He added that "the majority of configurations have no issues."
Rambus and Intel earlier discussed a number of interim fixes with PC manufacturers. One proposed fix: Ship PC systems with the third memory slot temporarily disabled.
But PC manufacturers quickly rejected that proposal, said one source close to the discussions.
Intel alerted PC makers to the problem of the 820 chipset late last week, which sent shock waves through the industry. One analyst has estimated that hundreds of thousands of high-end computers are affected by the glitch.
Chipsets essentially function as the communications hub for the internal components of a computer, and problems or delays with them have wide repercussions. A number of PC manufacturers, including Dell Computer, were going to announce Rambus-based PCs today and release the systems on October 25. The release date of those systems is now up in the air because of the problems with the 820.
Some such systems have already been announced. Hewlett-Packard, for example, a week ago announced a new Rambus-only corporate PC. But HP cannot deliver the system until the 820 chipset problem is resolved. Other PC manufacturers face similar delays.
Many segments are affected. Motherboard manufacturers will have to return to the lab and retool their products designed to accommodate the 820. Graphics chip companies have been waiting to market chips that can take advantage of the "AGP 4X" graphics port, a faster version of the graphics port in current PCs. Intel's 820, however, is the chipset that brings AGP 4X to life.
Good news for memory manufacturers
On the other hand, the delay could mean good news for some memory manufacturers, who will continue to see demand for garden variety SDRAM. The delay also opens up the door for chipset companies such as Via Technologies, which specialize in non-Rambus chipsets. IBM today said it would use chipsets from Intel-rival Via in three systems, and Micron Electronics is also using Via in some computers.
Via makes chipsets with a 133-MHz system bus, faster than the 100-MHz system bus on most Intel chipsets. Today, Intel released the 810(e) chipset, which contains a 133-MHz system bus. Although as fast as Via's chipset, Via's will support AGP 4X. Some Via chipsets also support faster 133-MHz SDRAM, which Intel will not do until next year.
The timing of the Rambus problems coincides with a spike in memory prices. The average retail price for 128MB of SDRAM is about $300, about double the price a month earlier.
Micron started looking at competing chipsets from Intel and Via about eight months ago and developed motherboards around both options, said Ken Knotts, spokesman for Micron Electronics.
"About two months ago, we couldn't see any reason why anyone on the consumer or small-business side would want to use the 820 chipset. The 820 just didn't make sense for consumers," he said.
"We had no crystal ball Rambus was going to have trouble on Friday," said Knotts. "We made a price-performance decision."
"We're the only company shipping a computer that supports 4X AGP graphics and full 133-MHz front side bus," said Knotts.
Some PC manufacturers, based on conversations with Intel today, said they are more hopeful of a resolution by the end of October.
"But it's still a clouded picture, and none of us really knows what's going on with Intel," said one PC manufacturer, who requested to remain anonymous.