CyberTimes Click here for Microsoft Internet Explorer 4.0 Preview 2!
August 27, 1997

Intel and Hewlett-Packard
Gamble With Faster Chips


SAN FRANCISCO -- Some of the nation's top computer chip designers are scratching their heads about what Intel and Hewlett-Packard are up to in a top-secret project to design a new chip -- code-named Merced.

Illustration: Christine M. Thompson / CyberTimes

The Merced, set for release within the next two years, represents both an opportunity and a risk for Intel. It would mark the most significant shift in the history of the immensely popular Intel microprocessor family, which began in 1979 with the Intel 8088 chip that powered the first IBM PC and has continued through Intel's latest, the Pentium II.

The Merced would be a departure from that tradition because the chip would use an "instruction set" radically different from the one that has evolved in Intel microprocessors.

The instruction set, etched into the chip's circuitry, comprises hundreds of basic operations, like adding, subtracting, multiplying and moving, which all other components and software in the computer depend upon.

Changing the instruction set for personal computing is akin to introducing a new industry alphabet -- with all the potential for grammatical lapses and communications breakdowns such a fundamental shift suggests.

That change, on top of the perhaps seven-fold increase in the number of transistors packed onto the surface of the chip, portends a greater transformation in the computer industry in the next five years than in the preceding 25 years.

The first Intel personal computer chip in 1979 had 30,000 transistors; the most recent Pentium II has more than 7 million. When it arrives, the Merced is expected to contain 20 million to 50 million transistors, said John Novitsky, a former member of Intel's Pentium's chip design team who is now vice president of marketing for the PC component maker Micro Module Systems.

And the chip will probably have a basic clock speed of almost 1,000 megahertz -- more than twice the raw performance of today's fastest chips. Moreover, the Merced will be a 64-bit microprocessor -- compared with the 32-bit limit of the current Intel Pentium. That means the computer can process twice as much information at once, promising much faster and complex searches of data bases and more realistic audio and video multimedia capabilities.

Today in CyberTimes


Intel and Hewlett Gamble With a Faster Set of Chips
By John Markoff

New Subtle Bug Infests PGP
By Peter Wayner

Ruling Frees Professor to Teach Cryptography
By Laurie J. Flynn

Surprise! People Actually Care About Bad Computer Reporting
By Chris Tacy

NEC and Microsoft Agree to Cooperate on Servers
By The Associated Press

Anti-Microsoft Alliance Tightened to Promote Universal Language
By The Associated Press

A Letter Readers: The New CyberTimes Front Page





The consensus in Silicon Valley is that if Intel, the world's largest chip maker, fumbles the shift to the new chip family, it risks damaging its near stranglehold over the personal computer hardware business.

No wonder the engineers who build the various other chips and hardware components in today's PCs -- all of which depend on being compatible with Intel's technology -- are intensely curious about what new features Intel may be planning. (Intel and Hewlett-Packard have had little to say on the subject so far. While Hewlett is a partner in the development, most computer executives agree that Intel is driving the project.)

"It's a good bet that Merced will mean a rather drastic change," said John Wharton, a former Intel microprocessor designer who is now an independent chip designer and who moderated a panel at Stanford University on Monday attended by some 500 of Silicon Valley's leading engineers. In the absence of guidance from Intel itself, the group pondered the industry-quaking question, "What would I do if I were designing the Merced?"

It is not a question for geeks alone. Investors, too, are always alert to any vicissitudes involving Intel, as was evident last Friday when Intel's shares plunged $6 dollars before recovering to end the day down $2.1875, closing at $96.1875.

The dip came after Thomas Kurlak, a well-known semiconductor analyst at Merrill Lynch, cut his rating on Intel to "neutral" from "buy," and reduced his 1998 profit estimate for the chip maker to $4.90 from $5.60.

Kurlak is forecasting an industry slowdown in 1998, as corporations cut their capital spending, and he predicts Intel will face increasing pressure on its profit margins.

The stock price has continued slipping in the last two trading days, ending Tuesday at $92.6875, down $1.50.

Already, there have been signs of increasing pressure on Intel, which is based in Santa Clara, Calif., as Advanced Micro Devices, Cyrix and other chip makers who make clones of the Intel product line have continued to harry the company with increasingly competitive products. But in a broader sense, Intel has become increasingly dominant in the microprocessor business in recent years.

For example, both Sun Microsystems and Digital Equipment offer highly sophisticated alternatives to Intel's microprocessor technology. But Sun and Digital have tiny market shares in chips for PCs, work stations and so-called network servers compared with the more than 64 million microprocessors for such machines that Intel sells each year.

And the one PC chip that represents a true consumer-market alternative to the Intel standard -- the Power PC used in the Apple Macintosh and Macintosh clone machines -- has an uncertain future. Work on the next-generation Power PC by a team of developers from Apple Computer, IBM and Motorola has stalled, industry engineers say.

So, in a very real sense, the future is Intel's to control or to fumble. Which is why the chip designers at the Stanford panel were so intent on pondering the imponderable.

For one thing, the Merced's designers must figure out how to insure that the chip's new instruction set will be able to read and run the thousands of existing MS-DOS and Windows software programs written for Intel's older family of chips -- or risk having more than 80 percent of the world's existing PCs be rendered suddenly obsolete.

And yet, the designers will not want to hamstring the Merced's potential to perform at speeds not possible on earlier Intel chips.

Most computer designers now expect the new Merced to be something of a silicon chameleon -- able to adapt to and handle many different types of software written for other computer-chip instruction sets, whether for older Intel chips or competing hardware.

But that adaptability, computer designers say, could be the greatest danger. If because of its flexibility the new Merced runs existing Microsoft software slower than can some current Pentium chips, the market may be slow to embrace it. The fact is that little new software is likely to be initially available that can take advantage of the Merced's next-generation capabilities.

In the early going, in other words, the Merced may simply seem musclebound to most users. Hence the risk of Intel's planned revolution.

"They're sitting on the most successful computer architecture in history," said Keith Diefendorff, an Apple Computer chip designer who appeared on the Stanford panel. "I'd milk the current Pentium architecture for another 25 years. There is no reason to change anything."

Related Sites
Following are links to the external Web sites mentioned in this article. These sites are not part of The New York Times on the Web, and The Times has no control over their content or availability. When you have finished visiting any of these sites, you will be able to return to this page by clicking on your Web browser's "Back" button or icon until this page reappears.

Home | Sections | Contents | Search | Forums | Help

Copyright 1997 The New York Times Company

Click here for Microsoft Internet Explorer 4.0 Preview 2!