November 20, 2003 12:07 PM PST

Intel sets the bar at 4GHz

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Intel is striving to break the 4GHz barrier for its chips.

The chipmaker, which discussed its plans in a wide-ranging meeting with financial analysts on Thursday, said it aims to boost the performance of a broad range of its products next year, including cranking up its desktop PC processors.

"Our goal is to hit 4GHz in 2004," Intel President Paul Otellini said during a meeting that was Webcast.

Intel is aiming to reach that clock speed with Prescott, an upcoming processor for desktop computers that will be built using a 90-nanometer manufacturing process. (A nanometer is a billionth of a meter.) Prescott is scheduled to ship this quarter to PC makers, Otellini said. But it's not expected to come in desktop PCs until early next year. Right now, Intel's fastest chip is the 3.2GHz Pentium 4.

While a 4GHz processor may seem fast, as least one analyst said the jump isn't a particularly large one for a brand-new processor.

"I would be really surprised if Intel didn't hit 4GHz in 2004. But don't dismiss the possibility it could blow by that mark," Mercury Research analyst Dean McCarron said.

Opinions on the importance of raw processor clock speed differ. Where Intel has always emphasized the speed of its high-end desktop processors--saying the Pentium 4's extra speed helps boost the performance of multimedia applications--other chipmakers, like rival Advanced Micro Devices, maintain that overall performance, measured by the work a chip can accomplish per clock cycle, is more important. The Athlon FX-51 chip is currently AMD's fastest chip, at 2.2GHz.

Intel also plans to increase production of Prescott processors quickly enough to ship 70 million of them in 2004, Otellini said.

The chipmaker expects that Prescott processors will be found in 60 percent of performance desktop PCs sold in 2004, while a Celeron derivative of the chip will garner 40 percent of lower-priced desktop machines, Otellini said.

Processor plans
In a break from its strategy in previous transitions to new desktop processors, Intel is expected to release the Celeron version of Prescott quickly, one source said.

Although Prescott is Intel's biggest planned release for 2004, the Santa Clara, Calif.-based company plans to deliver a wide range of new chips during the year.

One will be a 90-nanometer processor for notebooks called Dothan. Dothan, in combination with a new tri-band wireless module and a new chipset, will improve the performance of Intel's Centrino package for wireless notebooks, Otellini said.

Intel also plans to add a low-power Wi-Fi chip for cell phones and PDAs (personal digital assistants) to its wireless chip lineup and to release a chipset that is designed to turn desktop PCs into Wi-Fi access points. The products are designed to enhance the running of devices such as PCs, handhelds, and even consumer electronics devices for the home, Otellini said.

Otellini also disclosed that Intel will ship 100,000 Itanium chips in 2003, a figure that the company says is higher than most industry expectations.

Emerging geographical markets present a huge opportunity for the chipmaker, Intel CEO Craig Barrett said during the meeting. He likened Intel's efforts to expand into international markets to similar initiatives by beverage giant Coca-Cola, which uses a blanket advertising campaign in target countries.

"We're going to try to do the same thing with Intel--and 'Intel Inside'--going forward. We'll be very heavily involved in emerging markets to promote the sale and distribution of our products," he said.

The chipmaker will see about half of its sales from growing markets such as China in the future, Barrett said. But to keep up with rivals, the company will keep investing in existing markets, such as the United States, which represents about 30 percent of Intel's business and is the company's single largest market.

The result of all of technology investment will be a continuing cycle of technological one-upmanship among companies, governments and even consumers that will benefit Intel, Barrett said.

But Intel is still reluctant to say there's an upturn coming in business spending on PCs. Though Barrett noted that the Semiconductor Industry Association has forecast near 20 percent growth in semiconductor revenue in 2004, and though he reiterated Intel's optimistic fourth-quarter outlook, he said that Intel has seen few signs of a recovery in spending by businesses in the United States.

"We're seeing some sprinkling signs of that," he said. "But I don't expect to see a major upgrade cycle."

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Paul Otellini, chip company, Craig Barrett, wireless chip, clock speed

 

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