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September 29, 1999
Web posted at: 11:25 a.m. EDT (1525 GMT)

by Tom Spring

(IDG) -- In a stunning last-minute change of plans, Intel has postponed the launch of its highest-performance PCs, previously scheduled for Monday.

Calling system vendors on Thursday night, Intel acknowledged memory problems associated with the Rambus memory design in its 820 chip set. Intel reportedly found a "memory bit error" that curtails top memory capacity and speed. Intel has declined comment on the situation.

The stumble will affect high-end computers designed to run the fastest Pentium III processors. In this niche, "everybody is going to be reeling: Compaq, IBM, Hewlett Packard, Dell, and Gateway," says Kevin Knox, Gartner Group research director.

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The Intel 820 system chip sets support a faster system bus (133 MHz versus 100 MHz) and 4X Accelerated Graphics Ports (AGP) as well as Rambus DRAM (RDRAM) and other memory architectures.

Rambus is the company that designed and licensed RDRAM technology to memory manufacturers. The 820 chip set is expected to boost memory speeds as high as 800 MHz.

Vendors get the bad news

Compaq was contacted late Thursday by Intel and told that the 820 chip set was flawed. Compaq had planned to announce a line of DeskPros, scheduled to be available next month, but those plans have been postponed, says Jim Cortese, Compaq public relations manager.

"Intel contacted us and said it was experiencing technical problems with their 820 chip set," Cortese says. "That's all we were told."

"Dell engineers have determined systems based on the 820 are not production-ready and therefore we have postponed introduction," says Jon Weisblatt, Dell spokesperson. He confirmed Intel contacted Dell about a flaw in the 820.

Dell says customers will receive marketing material advertising PCs supporting the 820. Dell will be informing customers that those systems will be available only after Intel corrects flaws to the chip sets.

Scrap them?

Some observers have speculated that system vendors may need to rebuild large numbers of PCs or ship them with performance limitations -- or scrap them altogether.

Peter Glaskowsky, an analyst with Microdesign Resources, says that vendors might be stuck with as many as half a million systems that need to be scrapped.

Glaskowsky says 820 problems center around a third Rambus memory slot on motherboards originally intended to boost performance of the chipset. According to Glaskowsky, Intel discovered the third slot generates memory errors -- and motherboards with three slots will have to be scrapped.

Compaq doesn't face that problem because the final chip sets have not yet arrived, Cortese says.

Squabbling with system vendors

Gartner Group's Knox says Intel's misstep will rock already contentious relations between Intel and PC makers who have been bickering over the pricey 820 chip set. "We might see a lot of computer makers going with alternative chip set makers," Knox says.

Micron has already made that move: Its next-generation computer platform will be based not on Intel's upcoming 820 system chip set, but rather on a VIA Technologies alternative. The move, Micron says, will save customers between $200 to $300 over systems with the 820 chip set, without sacrificing system performance.

While the 820 delay is major news for customers demanding absolutely peak performance, it is a nonevent for most customers, says Knox. "Nobody was betting on the 820 being the leading chip set for another six months," he says, since conventional systems offer plenty of horsepower for most applications.

810e-based systems go ahead

Vendors will proceed with plans to announce lower-cost systems based on Intel's 810e chip set on Monday.

This silicon targets budget Pentium III PCs. Like the existing 810 chip set for Celeron systems, it integrates adequate but not stellar AGP graphics in order to save cost. The 810e doesn't support RDRAM, and you can't upgrade graphics later. It supports a 133-MHZ or older system bus, PC-100 memory, and UltraDMA/66 hard drives.

Additional reporting by Yardena Arar.