Intel cancels low-cost Timna chip

Intel has scrapped plans to launch Timna, a highly integrated processor for low-cost PCs that had been due to hit the streets early next year.

          Intel has scrapped plans to launch Timna, a highly integrated processor for low-cost PCs that had been due to hit the streets early next year.

          Technical problems had already forced Intel to push back the release of Timna from the second half of this year to the start of 2001. Ongoing technical difficulties, combined with the fact that PC makers have turned to other means to reduce overall PC system costs, led Intel to cancel the chip altogether, said Seth Walker, an Intel spokesman.

          "The market has continued to evolve since we began working on Timna, and many of the cost savings we originally believed would be achieved through the highly integrated design have already been achieved through ... other system cost reductions," Walker said.

          Intel's decision to cancel Timna may reflect changes in the PC market more than poor planning or execution on Intel's part, said Linley Gwennap, principal analyst with The Linley Group in Mountain View, California.

          "The Timna program started a couple of years ago, when it looked like the whole PC market was devolving to a $US399 price point, but now things have stabilised, and PC makers tend to be focusing on those $799 and $999 price points," said Gwennap.

          Still, the news caps a difficult month for Intel. On Thursday, it emerged that Intel's Pentium 4 processor for desktop PCs will be delayed by a month until November, according to sources at PC manufacturers. Then last week Intel announced that its third-quarter financial performance would be weaker than expected because of slow demand in Europe.

          Timna was conceived as a highly integrated chip that combined processor, memory and graphics functions into a single piece of silicon. The goal was to help PC makers reduce the overall cost of PCs and provide Intel with a chip that it could sell into PCs priced at $600 or less. Intel's Celeron, meanwhile, would serve the market for PCs priced at $1,000 and below.

          In the two years since Intel began work on the Timna, the company has switched to a more advanced manufacturing process that allows it to produce Celeron processors at less cost. It has also introduced low-cost chip sets that include graphics, as well as new motherboard designs that allow PC makers to build smaller PCs at less cost. Those developments have provided PC makers with alternative ways of reducing PC costs, making Timna less important for them, Walker said.

          In addition, PC makers have told Intel that they don't particularly want Timna any more. Manufacturers like the flexibility of using discrete components to design PCs, rather than a single integrated product. Moving forward, Intel will suggest that PC makers use Celeron processors and chipsets like its 820 and 820E for all kinds of budget PCs, Walker said.

          Finally, ongoing technical difficulties tipped the scales in favor of canceling the product. Intel had already delayed Timna's release earlier this year because of problems with the "memory translator hub," a companion chip used for communication with memory components. Ongoing difficulties with the MTH meant that Timna would have been delayed by a further month, pushing its availability beyond the launch schedule of PC makers, Walker said.

          Analyst Gwennap said the Celeron is "a great product for most low end PCs." However, if the market takes off for Internet appliances, which are simplified computers that generally sell for less than $300, Intel may find it more difficult to address that very low-cost market using Celeron, he said.

          "Intel could have offered Timna as a way to get into those appliances, so now they'll have to find a way to offer low cost versions of Celeron," Gwennap said.

          Intel, in Santa Clara, California, can be reached at +1-408-987-8080 or at http://www.intel.com/.

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