DEC Alpha to take high, low roads

Electronic News, July 1, 1996 by Elaine Chen, Sarah Cohen

Mike Griffith, senior market analyst for In-Stat's micrologic service, called the Samsung/Digital agreement "revealing. Digital realizes they can't do it on their own. But we'll see what happens. Not much has happened so far with Digital's partnership with Mitsubishi."

In 1993, Digital licensed Mitsubishi as a second-source manufacturer for the Alpha (EN, March 22, 1993), but those chips scheduled to debut in the market in 1994 were delayed until 1995. Industry observers have yet to be convinced of the effectiveness of the Digital/Mitsubishi relationship. However, Mitsubishi is currently in joint development with Digital for the Alpha 21164PC slated to appear in mid-1997, said Digital's Mr. Miller.

Another price lowering measure Digital has taken is to "value engineer" the Alpha, specifically by converting from a 0.35- to a 0.25-micron process by 1998 and also by refining the chipsets and motherboard. "We can take the existing designs and move then into new processes," said Mr. Miller, adding that Digital's Hudson, Mass., wafer fab was designed to support up to 0.18-micron processes.

Digital's 500MHz Alpha 21164 is sampling now and scheduled for volume production to coincide with the release of FX!32 and Windows NT 4.0 this fall. Price has yet to be determined. The 433MHz Alpha is available now at $1,492 in 1,000-unit quantities. In early 1998, Digital intends to debut a cousin to the Alpha 21164, the Alpha 21264 with motion video instruction, to be released in the same time-frame as the Intel "Merced" MPU.

The manufacturing and design moves are especially aggressive given that Digital has only just recovered from years of losses. During the recent Bear Stearns conference, Digital's Mr. Strecker stated that with manufacturing costs now lowered, "it's no longer looking like the kind of losses we've had in the past," and that Digital only needed to "stay the course."

Yet its current strategy is clearly far more ambitious, leaving analysts like Mr. Griffith of In-Stat wondering why Digital would align itself against Intel. "The Alpha's a very, very high-end workstation part...I'm not so sure it's important to align themselves against the Pentium," said Mr. Griffith. He offered Digital a final warning: "There hasn't been anyone yet who's gone head to head against Intel and won."