Paper Prescott

Xbit Labs reports that due to problems Intel is having with strained silicon, we are likely to see just a paper launch of Prescott in December, with no real availability until 2004.

This is not terribly surprising given the various indicators (or mostly, lack of such) over the past few months.

However, up to now, we haven’t known if this is a small problem, or a big one.

A small problem would have been if Intel could get the processors out, but they couldn’t overclock very well. Bad for us, but not too big a deal for Intel.

A big problem would be if Intel can’t make enough processors that cut it even at default ranges for anybody. That would affect Intel far more.

This news item would seem to say that Intel has the latter problem.

Another indicator which tends to back this up is the emergence of engineering sample Prescotts here and there. They have not been 3.4GHz samples. Rather, they’ve been 2.8GHz samples.

One could read too much into this, but this might mean that Intel has the same problem with Prescott than AMD had with Hammer; they can make them go, but they can’t make (enough of) them go fast.

What Does This Mean For AMD?

Well, it’s hardly bad news, but it’s probably not as good news as you might think, for the moment. The reason for that is AMD isn’t going to be making very many Hammers anyway for the rest of the year.

It probably does help to make sure AMD will end up selling the Hammers they do make at the price they want the rest of the year. That could be enough to give AMD a breakeven/slightly profitable quarter the last quarter of the year.

But then again, they’d probably would have done that anyway.

It’s doubtful that a lot of would-be Intel buyers (especially at the corporate level) would at least initially shift over to AMD due to this delay. They’d either buy a Northwood, buy an Extreme Edition, or just wait a bit.

No, this is one of those problems that will take a while to have an effect, and even if it does, it will be limited by a number of factors.

First, AMD can’t significantly outclass Intel until they start making 90nm processors and lots of them. That won’t be for some time to come.

Second, AMD itself won’t start making Hammer in serious quantities until the second quarter of 2004, and even then, we’re only talking about 15% of world CPU production.

Third, one ought to keep in mind what happened the last time AMD had an edge on Intel (after the 1.13 PIII fiasco). The edge was bigger and lasted a much longer time than is likely here. What impact did it have?

AMD’s share of world CPU production went from about 18% to 23% of production, and they had a number of fairly profitable quarters.

Now AMD could certainly use a repeat of that, and there’s nothing wrong with that, but it won’t be worldshattering for the computer market as a whole.

That’s the difference between Prescott delays and Hammer delays. Yes, both companies were or are not being very honest about their problems. But Intel’s existence isn’t threatened by Prescott delays the way AMD’s was with Hammer’s. Intel could even skip Prescott and go to Tejas a year from now and not suffer too much damage (indeed, if you’re a PIV owner, you ought to be thinking along these lines already).

However, hard as it might be to believe, AMD could squander this gift, and here’s how.

A Possible Intel Trap…


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