Grove flags P6 shipment date as recourse to MPU inroads

Electronic News, Jan 31, 1994 by Walter Andrews

NEW YORK -- Intel will begin shipping in 1995 its next microprocessor, code-named the P6, as a follow-on to its new Pentium, which is only now ramping up into full production, according to Andrew Grove, Intel president and CEO.

Mr. Grove last week said the new MPU is expected to operate at 300 MIPS, about three times as fast as the current 60MHz and 66MHz versions of the Pentium, and integrate approximately 6 million transistors on-chip, about twice that of the Pentium.

In a presentation to the New York Society of Security Analysts, the Intel CEO said P6 will start production using the 0.6 micron process being used to fabricate new higher speed Pentiums in the 100MHz range--which are currently being sampled--and then move to a new 0.4 micron process.

Mr. Grove and other Intel executives did not say when the P6 would move to the 0.4 micron process, or even if the transition would be in 1995, and a timetable for a production ramp up was unclear. Although Intel used the term "shipping" in its P6 statement, Mr. Grove's remarks to analysts would indicate the company is making early 1995 plans for demonstrations and sampling on the part.

Mr. Grove also promised a fast pace of new Intel product introductions. "What you are going to see is generations cannibalizing generations of processors one after the other." He likened the procedure to a new generation "big fish" eating the smaller fish of previous-generation processors.

He said the P6 will offer complete binary compatibility with previous generations of the Intel architecture. Intel expects to be able to show a year from now systems using the P6, Mr. Grove said. "A 1,000 MIPS system will be straightforward with P6 technology" based on a four-processor system, he maintained.

Mr. Grove also said Intel plans capital spending of $2.4 billion in 1994, an increase of 26 percent over 1993, to upgrade its plant and equipment, which he said is once again the largest in the semiconductor industry. He said Intel's capital spending exceeds that of its next four competitors combined.

One Wall Street analyst, Vincent J. Glinsky of Fahnestock, said Mr. Grove's P6 comments appeared timed to upstage an Advanced Micro Devices announcement that Compaq would buy AMD's 486 microprocessors--the first top-tier PC company to do so. "It appears to be aimed at the AMD announcement. What else?" Mr. Glinsky said, adding that Compaq is playing "a dangerous game" in that Intel could lessen Compaq's allocation of new MPUs to the extent the PC company buys competing devices.

Mr. Grove did not mention the AMD-Compaq deal during his presentation. The fact that no analysts brought the subject up during the following Q&A session was described by Gordon Casey, Intel's director of investor relations, as "amazing. It's really amazing."

In conversation with a small group of analysts following the NYSSA session, Mr. Casey was asked for his reaction to the deal. "It's hard to say. Why did they do it now with this (Intel vs. AMD) court case going on? The whole ballgame could change in a few weeks."

He declined comment when asked if Compaq might be trying to put some competitive price pressure on Intel. "You said that."

Mr. Grove debunked the reservations of some analysts that the Pentium might have more capability than needed by most corporate customers, who are satisfied with the capability of the systems based on the predecessor 486 chip. "I never met a computer customer who complained he bought too much processing," he said.

Intel's objective is to make the PC the centerpiece of the coming revolution in interactive communications, Mr. Grove said.

Asked during a Q&A session following his presentation about the Apple-IBM-Motorola PowerPC processor, Mr. Grove noted that thus far only Apple and IBM are using it. "No customer other than those two has ever asked for it," he said.

Mr. Grove also noted during his presentation that Intel's chipset and flash memory businesses, which are less profitable, were growing at an even faster pace than the MPU sector.

Mr. Casey told the analysts that Intel's information is that demand for PCs has continued through January and did not die after the Christmas buying season. The PC manufacturers "see sustained demand out there," he said. "Now they're scrambling for more stock."

Mr. Casey said both the Santa Clara, Calif. and Ireland fabs had started producing the new higher-speed Pentium for inventory in 4Q93, using the new 0.6 micron process.

Intel will not officially unveil the device until customers, which have been taking delivery of "sample quantities," are also ready to announce their systems using the chip. "We'll do it all at once and get maximum benefit out of it," Mr. Casey said.

Intel plans to hold a Feb. 16 open house at its new Fab 10 in Ireland. He said Intel may say more about the new Pentium at the open house. He mentioned one problem: Intel is having difficulty getting a map from the Irish showing the way from the airport to the plant.

Intel also is having some local environmental and labor-organizing problems at its fabs in Albuquerque, N.M., he acknowledged.