Setting the pace

Setting the pace

Intel has raised the bar on processing speeds with the release of its 865 and 875 chipsets and the new 2.80C, 2.60C and 2.40C GHz 800MHz-bus Pentium 4 processors, and incited another frenzy of activity within the chipset and motherboard markets.

Intel’s 865 ‘Springdale’ and 875 ‘Canterwood’ chipsets support the vendor’s new 800MHz-bus CPUs and dual-channel DDR400 memory, as well as existing high-end features such as AGP 8X and 533MHz-bus Pentium 4 CPU compatibility. The 875 chipset also boasts backwards compatibility with 400MHz-bus P4 CPUs.

The 800MHz (quad-pumped 200MHz) CPU bus is an significant step up from previous Pentium 4 533MHz (quad-pumped 133MHz) architecture, effectively increasing overall bandwidth to a massive 6.4GBps compared to 4.2GBps for 533MHz-bus CPUs.

Increasing the CPU bus speed from 133MHz to a 200MHz base gives Intel an important edge over AMD. Previously AMD’s faster bus speeds — 166MHz (double-pumped 333MHz for the latest Athlon XP chips) — allowed the vendor to compete with Intel’s CPUs which feature higher clock speeds.

It will only be a matter of time before AMD responds and it is expected the Athlon XP team will release a 400MHz-bus processor within the next couple of months. In the meantime, AMD has slashed the price of its 333MHz-bus Athlon XP 3000+.

Licensed Intel Pentium 4 chip­makers SiS (Silicon Integrated Systems) and VIA Technologies have wasted no time in launching their own chipsets compatible with the 2.4C, 2.6C, 2.8C, 3.0C 800MHz-bus Pentium 4 CPUs. SiS launched its SiS648FX chipset on the same day Intel launched its Springdale 865 chipset — May 21 — following the extension of its long-term chipset licence agreement with Intel.

Many motherboard vendors have integrated the SiS648FX chipset into their boards, including heavyweights ASUS, Gigabyte and MSI. Although the SiS648FX chipset does not sport the same features as the Intel’s 865PE chipset, it represents significant cost savings to motherboard vendors looking for a price advantage over Intel.

Unlike Intel’s Springdale Dual DDR400 chipset, the SiS648FX chipset supports only single-channel DDR400 memory, and has no Firewire serial bus and does not support serial ATA.

VIA has scheduled the release of its PT880 chipset for this month. Comparable to Intel’s 865PE, VIA’s PT880 chipset supports dual-channel DDR400 or the VIA-centric Quad Band Memory (QBM). The vendor will also release an entry-level 800MHz FSB chipset, the PT800, which only supports single-channel DDR400 memory.

ATI, a relative newcomer to the motherboard chipset market, is expected to release its own chipset that supports 800MHz P4 CPUs in September. While demand for the new technologies has been short of meteoric, it appears to have been greater than Intel anticipated, resulting in a supply shortage of 3GHz Pentium 4 CPUs last month.

Whether the temporary shortage was caused by the usual supply/demand conundrum or whether it was a strategic move by Intel to slow down the rollout of the technology because AMD is no longer nipping at its heels is open to conjecture.

“Intel’s decisions to release new products is largely dependent on its competitor’s moves,” sales account manager for Gigabyte Technology, Alan Chen, said. “If AMD is close, then Intel will move quickly. AMD is currently lagging behind so Intel is slowing up the rollout of its new technology. Intel is setting the pace.”

Chen said that Intel’s new platform is stable and would not be subject to change as quickly or frequently as earlier Intel architectures.

“Previously FSB (front-side bus) speeds were changing every six months,” he said. “Now the 200MHz baseline has been set, we won’t see another increase for some time, or at least into 2003. We haven’t seen any new [FSB] technology coming through.”

The 533MHz-bus Pentium 4 platforms may be standard issue for new Intel PCs, but are still too new to warrant CPU swaps.

Not surprisingly, demand for the new 800MHz-bus compatible motherboards and CPUs has been relatively low as the technologies had only been on the market for two months, managing director of components distributor Australia IT, Michael Lau, said. However, demand is expected to grow exponentially over the next 6-12 months.

“Demand for the 865PE motherboards from small retailers and systems integrators is growing steadily and will continue to grow,” Lau said.

“As part as its CPU roadmap, Intel expects 800MHz-bus CPUs to make up 20 per cent of its total CPU sales in Q2, 40 per cent in Q3 and 60 per cent in Q4,” Chen said.

Intel product manager at Synnex, Darren Tan, said the components distributor experienced strong 865 motherboard sales in the last two weeks of June.

“Sales started to pick up in June because of the Seagate hard drive/Intel motherboard bundle and Intel launched an aggressive campaign where all Intel GID members were offered $10 rebates on every $100 they spend on Intel 865 motherboard purchases,” he said.

As part of the Intel/Seagate promotion that ends on July 25, 2003, resellers that buy Intel’s latest motherboards from participating distributors are eligible to purchase a Seagate Barracuda 7200.7 hard drive with Serial ATA for the price of a Seagate Barracuda 7200.7 hard drive with Parallel ATA.

“In the first month of its release, about 10 per cent of the Intel motherboards we sold were the 865PE boards,” Tan said. “This month we’re expecting the boards to make up 40 per cent.

“A lot of end users will go for the 865 chipset motherboards from ASUS and Gigabyte, while Intel 865 motherboards are strong in the OEM and corporate markets.”

Tan said bundling the motherboards with other componentry offered resellers significant cost savings.

A number of distributors are currently offering Intel CPU and motherboard bundles, while others such as Australia IT are bundling the 865PE motherboards with CD writers and consumables like floppy disks. Synnex is currently offering Kingston memory — DDR400 — with the new Intel chipsets, and conducting in-house testing to ensure compatibility and to allay reseller fears about chipset-memory compatibility.

Resellers should be cautious when considering component bundles, warned Lau, and should do their homework otherwise they could be stuck with a load of stock they couldn’t even give away.

“Many resellers get trapped by these attractive-looking bundles. They end up overstocking on motherboards because some distributors want to get rid of their own stock, knowing that it will soon become obsolete,” Lau said.

Given the rate at which CPU technology evolves and the ever-growing myriad of products flooding the market, as well as day-to-day price shifts and compatibility issues, it is exceedingly difficult for resellers to know which products to stock and how much. The message from the components vendors and distributors is loud and clear — get on that phone and solidify a knowledge-based relationship with your distributor! Make your distributors work for their margins. However, as Lau points out, the ball doesn’t just lie in the distributor’s court.

“About 70 per cent of resellers want to stock motherboard brands like ASUS, Gigabyte and MSI because they are easier to sell. They’re failing to differentiate themselves,” he said. “A lot of resellers stay away from smaller brands like Shuttle and Albatron because they don’t want to have to work for the sale.”

Gigabyte’s Chen said that resellers should take care when selecting which product to stock and should ask themselves the question, “What makes this product different?”

“It is critical that resellers and distributors establish how much demand there is for a particular component and be aware of what products vendors are in the process of developing for future release,” Chen said. “Overstocking will inevitably lead to price wars in the channel and margin erosion.”

To prevent overstocking, Chen suggested distributors and resellers must work closely with their vendors to gain a clear insight into where the technology was going and develop a transition plan for when a new product is released.

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