Intel Puts 4 GHz Processor on Back Burner

Backing away from a promised processor-speed milestone, Intel (Nasdaq: INTC) yesterday said it would not release a 4 GHz version of its Pentium 4 processor for personal computers early next year as had been planned.

Intel did not give specific reasons for the decision to redirect engineering staff away from pushing the clock speed of the Pentium 4 higher, but speculation among analysts was that the chip demanded too much power and created too much heat to be feasible in current PCs.

The leading chipmaker said it instead will dedicate resources to pushing dual-core processors to market with more features and to get more actual computing speed out of chips with the same processing rates by improving functionality. For instance, chipsets might have more built-in memory, which in turn would enable data to be retrieved and presented to the user more quickly even with the same-speed processor.

Intel had begun to downplay so-called clock speed of processors within the past year, and other chipmakers have followed suit, emphasizing advances such as dual-core, which essentially puts two processors on one chip, enabling two processor-hungry applications to be run at the same time.

Speed Kills

Gartner (NYSE: IT) analyst Martin Reynolds told the E-Commerce Times that Intel and other chipmakers pushed so-called clock-speeds as a measure of chip advancements but are now eager to have all aspects of a processor's performance taken into account.

One reason that speed can be de-emphasized, he added, is that the rise of mobile PCs has made it easier to sell processors based on more than just sheer computing horsepower.

"Speed is no longer the ultimate or only goal," Reynolds said. "Users recognize the importance of battery life and portability and higher functionality."

Still, the move had to be a difficult one for Intel to make because of its public stance that it would bring a 4 GHz chip to market early in 2005. "It's one thing to talk about things other than speed but another to pull back this hard and late," he added.

The decision to change course only adds to the growing sense that Intel has hit some strategic speed-bumps.

The company has seen profits fall and inventories rise in recent quarters amid a slowdown in demand, has canceled some chips and recalled others. It is also preparing for the ever-precarious process of handing power to a new CEO when Craig Barrett retires next year, and it has seen top rival AMD (NYSE: AMD) make some inroads in recent quarters.

Still Racing

Less clear is whether the decision will slow the industry's overall progress toward higher and higher clock speeds. Some analysts say Intel's role as market leader might convince others to back off pushing the speed envelope, while others say rivals might see an opportunity to beat Intel at its own game.

Research firm IDC had been predicting that chip makers, led by Intel, would be able to mass produce chips that reached speeds of 10 GHz by the end of the decade and said that Intel's plans to reach 4 GHz early in 2005 kept the industry on track to reach that milestone.

While predicting that some firms would continue to chase ever-faster clock speeds, especially those whose audience includes cutting-edge computer users who demand more horsepower, Mercury Research analyst Dean McCarron said Intel might win more customers among PC-makers, some of whom have had concerns about the heat generated by Intel's fastest chips.

While it looks bad for Intel to reverse its position on the faster Pentium 4, he said, "there's more than one way to measure performance."