Intel Delays Shipment of 820 Chipset

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Event Summary

September 24, 1999 - Intel Corp. will delay, indefinitely, the launch of its 820 chipset, the second chip delay announced by Intel this week. The 820 chipset is intended to replace the 440BX chipset currently used with Pentium II and Pentium III processors. Intel says the 820 chipset will improve overall system performance by reducing bottlenecks in memory performance and graphic performance. Rambus (whose memory forms the base for the 820) is currently trying to "resolve several flaws" in its product.

Market Impact

PC vendors have been waiting for the 820 chipset for some time, but this latest delay has caused some (including Compaq and Dell) to put 820-based PC shipments on hold. The overall market will suffer slightly, but the greater potential impact is to Intel's reputation. The 820 problem is the second major chip or chip set problem within a week. (see News Analysis: "Flaw in Intel Xeon 550 Chips: Shipments Stopped" 9/29/99) Intel has suffered blows to its credibility in the past (e.g. the infamous "Pentium flaw" a few years ago), and has always recovered - often coming back even stronger. However, at some point, systems vendors may look to work more closely with other chip vendors to have an alternative to the Intel hegemony.

Coupled with the problems is the growing belief that Rambus memory provides insufficient performance boost for the premium price being charged. (An 820 chip set system w/Rambus technology is expected to perform about the same as a 440BX system with SDRAM, but at a cost of $6/MB for Rambus Dynamic RAM, vs. $3/MB for pre-Taiwan-earthquake SDRAM).

User Recommendations

Only users who must to have the latest chip technology will be seriously affected by this delay those users will obviously have to delay their purchases of 820-based systems until Intel and Rambus fix the problem(s). For other users, this is a non-event, because there are other systems available that will fill the need. In general, users should stick with 440BX based systems due to their low risk and good performance.

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