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December 16, 1999
Web posted at: 1:09 p.m. EST (1809 GMT)

by Tom Mainelli

(IDG) -- Intel escalates its speed war with Advanced Micro Devices next week when the chip giant is expected to announce not only a 750-MHz Pentium III CPU that matches AMD's latest Athlon, but also an 800-MHz PIII.

The debut occurs about three weeks in advance of Intel's original target date for announcing the 750-MHz PIII, and months ahead of the expected release of the 800-MHz PIII, sources say. Intel declined comment on the expected announcement.

AMD managed a similar feat when it announced its 750-MHz Athlon processor on November 29 -- nearly two weeks earlier than expected. That processor is currently the fastest in the market, having snatched the top spot from Intel's PIII-733 announced on October 25.

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The need for speed

Intel demonstrated a prototype 800-MHz Pentium III system at the CeBit trade show in Germany last March. At the time, the company claimed the CPU was about 60 percent faster than its Pentium III Xeon, which had just come out.

Systems on the horizon

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But don't look for a PIII-800 system under the Christmas tree. Although sources say Intel is already shipping limited quantities of 750-MHz and 800-MHz CPUs to PC makers, it isn't likely that many of these high-speed PCs will be for sale before January.

These fast systems will define the new high end. For example, Compaq is readying an addition to its Presario line powered by the Athlon-750. The Presario 5900Z will carry an estimated street price of $3456. It has 128MB of SDRAM, a 34GB hard drive, both DVD-ROM and CD-RW drives, an NVidia GeForce 256-based graphics card with 32MB of SDRAM, and a 19-inch monitor. More mainstream configurations, with smaller hard drives and monitors, are estimated to be priced around $2500.

AMD and Intel: Playing leapfrog

Intel's expected early release of the new PIIIs shows the company is taking the challenge from AMD's Athlon processor very seriously, says Nathan Brookwood, chip analyst for Insight 64, a market research firm.

"It's clear that we now have competition at the high end," he says. Processors at that level are judged by performance, not price, and each company wants to foster the image that its processor runs the fastest PCs on the planet.

AMD successfully accelerated the release of faster Athlon processors, and now Intel may be able to ramp up speedier PIII processors just as quickly.

Regardless of when Intel unveils its next top-speed chip, Brookwood says it's unlikely vendors will be able to ship systems with PIII-800s any time soon. Even direct vendors such as Dell probably won't be able to turn out new systems before the end of the year, he says.

And whenever Intel grabs the speed lead with an 800-MHz PIII, it probably won't hold it for long. AMD's chairman has publicly declared that the company expects to introduce an 800-MHz Athlon in the first half of 2000. Brookwood says he'd be surprised if AMD didn't announce the new chip within the next few weeks.

"They have the technology to roll out new, faster rates almost whenever they feel like it," he says.

CPUs' domino effect

Analysts expect 900-MHz Athlons late in the first quarter or early in the second. A few years ago, 1-GHz processors seemed a far-off dream; most market-watchers now expect to see them in 2000.

Intel and AMD's game of leapfrog benefits not only high-end users who want the latest and greatest technology, but everyone else in the market for a new PC, Brookwood says. Every time a new processor comes out, existing units are pushed down the price ladder.

So, for example, if a sub-$1000 PC in mid-1999 offers a PII-400, by mid-2000 that same money is likely to snag a 700-MHz PIII system.

Competition is great, and the current speed war means "everybody wins," Brookwood says.

So the question is, how long can AMD keep pace with Intel? Brookwood says AMD's current Athlon technology should let the company offer comparable processor speeds for the foreseeable future. But it's a long race, and Intel has proven that it is a formidable competitor in marathons.

"As soon as you let up, even for a quarter or two, you're in trouble," Brookwood says.