Intel Outpaces Its Competition

The Springdale chipset was originally reported to have a 667-MHz front-side bus (FSB), and competitors VIA Technologies, Taipei, Taiwan, and Silicon Integrated Systems (SiS), Hsin-Chu, Taiwan, were developing their own chipsets based on that spec. However, according to one motherboard manufacturer that requested anonymity, Intel switched to an 800-MHz bus at the last minute, sending its competitors scrambling to reengineer their chips to remain competitive.

But reports that motherboard vendors had canceled their orders from VIA and SiS are untrue, according to the source, and the jump from 667 MHz to 800 MHz wouldn't be that difficult, nor should it take too long to catch up. Still, Springdale is set to ship this quarter, and no one outside of Santa Clara, Calif.-based Intel has a license for it.

What this means is that for at least one or more quarters, the only Springdale-enabled motherboards from mainboard makers will have the Intel chipset, and boards with Intel's chipsets can run from $20 to $60 more than boards with chipsets from VIA and SiS. For price-conscious customers, that could be an issue, especially with larger orders.

"If you only have a choice of Intel boards, you either pay up to $60 more, or you start looking at alternatives," says Joe Bhaghani, president of Alpha Business Computers, a systems builder in Corona, Calif. "I think Intel is going to hurt themselves because [if price is an issue] I will push customers to AMD."

Even though Intel and its chipset competitors/customers haven't signed a licensing deal for the Springdale chipset, it is possible for a chipset maker to start developing its own equivalent chips, since Intel discloses a great deal of technical information and specifications at its biannual Intel Developer Forum (IDF) and through its developer network. Still, the delay will give the Springdale chipset a big lead, as much as three months or more. And that could hurt VIA and SiS.

"That would scare away tier-one OEMs if they don't have a licensed product," says Dean McCarron, a partner at Mercury Research, Scottsdale, Ariz.

Springdale will accompany the Canterwood CPU, Intel's next-generation of the Pentium 4. Canterwood will be the first desktop CPU to feature a 1-MB L2 cache,a big jump from the 512-K L2 cache in current Pentium 4s. Springdale will also support Northwood CPUs, which cover the 2-GHz and higher chips.

Springdale motherboards will be a major advancement over previous boards, with features previously not seen on motherboards. They include dual-channel Dynamic Data Rate (DDR) 333 and 400 memory (allowing for both 333-MHz and 400-MHz memory), the 800-MHz FSB, AGP 8X, integrated Serial ATA disk I/O, integrated 802.11b WiFi support and a Communication Streaming Architecture (CSA) bus for dedicated bandwidth to Gigabit Ethernet devices. The CSA bus is an optional controller for connecting motherboards via Gigabit Ethernet. The CSA bus offers 2 Gbps of bandwidth and is a separate controller from the PCI bus, because PCI can only offer 1 Gbps of bandwidth.

Competitive Landscape

VIA has already suffered from not having a license for Intel's 533-MHz front-side bus. When Intel releases a new chipset or CPU, it insists a new license is needed. VIA, however, didn't think a new license was warranted, since the 533-MHz FSB was just a tweaked 400-MHz FSB. Intel disagreed, and slapped the company with a lawsuit in September 2001.

Granted, VIA has won some legal victories, but, in the long run, it might lose the war. According to McCarron, VIA went from holding 28 percent of the chipset market in 2001 to 18 percent for the first three quarters of 2002. That drop came from motherboard makers being unwilling to license the VIA chipset because it was not licensed by Intel (see "Intel On Top"on previous page).

VIA makes no bones about its feelings toward Intel and its licensing practices.

"Intel's bus licensing strategy is clearly designed to inhibit competition in the P4 chipset market and trap consumers into a compatibility standard," says Richard Brown, vice president of worldwide marketing for VIA, Colorado Springs, Colo. "It can continue to maintain high prices and unfairly defend its position by casting serious doubts among OEMs, systems integrators and motherboard companies over whether its competitors have the 'right' to produce chipsets for the various different versions of the P4 processor."

Meanwhile, SiS, with U.S. operations in Sunnyvale, Calif., acquired a license last November for Intel's hyperthreading technology. SiS has also released several new motherboards, for both desktop and laptop computers, that will support hyperthreading, DDR333 and a 533-MHz FSB. It benefited from VIA's loss of momentum in 2002, with its marketshare climbing from 9 percent in 2001 to 14 percent for the first three quarters of 2002, according to Mercury Research.

ALi, formerly Acer Laboratories, has gotten back into the desktop chipset market after spending the past few years focused on the laptop market. It was very careful in commenting on Springdale.

"Intel is discussing different technologies with us, but I cannot comment on what technologies," says Frederic Leung, associate vice president of marketing and sales for ALi's U.S. office in San Jose, Calif.

Leung believes ALi, Taipei, Taiwan, will be pretty competitive timing-wise, and even if Intel is first, third-party chipset vendors are still competitive, either by pricing or differentiation in features.

Air of Suspicion

All the fuss over Springdale has Mercury Research's McCarron suspecting there could be some sort of hang-up, because these negotiations are usually done very quietly. "The fact [licensees] are discussing the licensing issue, I suspect, means that the various chipset vendors are trying to license the technology, and the price

hasn't come down to the right number," he says.

But even when VIA, SiS and ALi secure Springdale licenses, Alpha Business Computers' Bhaghani says he is getting frustrated with the constant changes in the Pentium 4 technology that makes obsolete the previous generation and kills backward compatibility. Since the P4 was introduced, it has gone from a 423-pin version to 478 pins, a 400-MHz FSB to 533 and now 800, plus a variety of memory bus changes.

"Regardless of whether or not the other guys get a license, all these constant changes are scaring people off," he says. "Someone who spends $800 on a Pentium 4 will have a problem because three months from now, it's no good. It won't be compatible with the next generation from Intel."

The next IDF takes place Feb. 18 to 21 in San Jose, Calif. Intel plans to make a batch of announcements there, including one about Canterwood and Springdale.

Andy Patrizio ([email protected]) is a freelance writer based in Los Angeles.