June 2000 Industry Update

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Processor Update

Intel Processors

After many months of hearing about speed grades that could not be obtained, Intel apparently turned the corner this month with the introduction of the 933MHz Coppermine. Other sources have claimed that inventory of 800MHz+ FC-PGA parts has been growing,

Several possible reasons have been offered for this. The first is that motherboard makers in Asia have been slow to deliver designs for these parts, , most likely because of concerns about processor availability. Another possible reason is that Intel has no viable FSB 133 chipsets, and customers are wary of VIA chipsets. This may still be true of many businesses, but recent numbers regarding VIAs market share seems to contradict this. Some have said that there is not a lot of demand for high speeds in general, and that the PC industry is experiencing a slowdown in demand.

One possibility that was not offered by those I spoke with is that the release of the Katmai processors has allowed Intel to target their FC-PGA parts for the higher speed grades. The 500MHz to 700MHz range is considered the ‘sweet spot’ where the majority of processors sell, and Intel could not afford to let AMD take any additional market share. Due to packaging issues, Intel may have been forced to focus on these speed ranges, cannibalizing the higher speeds where profits are better but volumes are much lower.

AMD Processors

AMD is now telling resellers that the K75 will likely be gone by the end of Q2, and that K6-2 processors may become scarce as well. During May, there were several reports of K75 ‘fire sales’ from brokers, with prices going to the floor on the spot market. Apparently, K6-2 processors are selling extremely well at this time, causing possible shortages in the channel.

The Thunderbird will be taking over the Athlon name, and is being referenced as “Athlon with performance-enhancing on-chip L2 cache”, while the K75 is being called the “Classic” Athlon. Both Duron and Athlon-with-performance-enhancing-on-chip-L2-cache (uh, mind if I continue to call it Tbird?) were officially announced during the week of Computex (June 5), with shipments of Tbirds being made to OEMs. This is not unlike the release of the “Classic” Athlon, when revenue shipments were announced, but the DIY market didn’t see product for a short while.

Tbird is shipping in speeds from 750MHz to 1GHz, however there were some early shipments to OEMs in the 650MHz and 700MHz speed ranges – so it is possible that some of these may make their way into the gray market. Duron processors will be sold in the 600MHz to 700MHz range.

I originally reported several months ago that AMD had indicated the production capacity of the Dresden facility is 5000 (8 inch) wafers per week. Recently, a source close to AMD informed me that he believes it is closer to 8000 wafers. AMD has also officially indicated that they expect to ship 1.8 million Athlons in Q2, 3.6 million in Q3 and 7.2 million in Q4. Unofficially, it has been reported that major motherboard manufacturers have committed to approximately 500,000 motherboards for June/July, but chipset availability may hamper that a bit.

Other Processors

VIA officially announced the VIA Cyrix III processors on June 6, running at speeds of 533MHz to 667MHz. Interestingly, this processor uses the Centaur core technology rather than Cyrix. The lower power requirements and simpler (therefore, less expensive) design won out in the end. VIA apparently believes that there is huge potential in the notebook and Internet Appliance market for this offering.

It appears that Transmeta is gaining some ground in the notebook arena, with major OEMs all having prototypes designed. Some estimates claim that 3 million of these will ship this year.

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