Intel on Monday launched the first Pentium 4 processor based on its 90 nanometer manufacturing process. The chipmaker is introducing the processor with unprecedented aggressive pricing, according to analysts.
The new processors, which were code-named Prescott, begin at $178 each in quantities of 1,000 for a 2.8-GHz device, and range to $417 for the 3.4-GHz version.
"I have never seen Intel introduce a top-of-the-line part at such a low price," says Peter Kastner, an analyst with the Aberdeen Group.
The production of the devices on 300-mm wafers, with a die size that is about 30% smaller than rival Advanced Micro Devices Inc.'s processors currently manufactured on a 130-nanometer process and 200-mm wafers, provides Intel with the ability to offer the most cost-effective high-end microprocessors available, says Bill Siu, VP and general manager of Intel's Desktop Platforms Group.
"Our ability to supply the product in very high volumes and continue to drive the cost down will be a great benefit not just for Intel but also for consumers," Siu says. All Prescott processors will be manufactured on 300-mm wafers, which provide a 30% price advantage over the previous-generation wafers, he says.
"Intel continued to invest heavily in both technology product development and manufacturing capacity during the downturn, and we've said repeatedly that is critical to continue to advance the products, the technology, and the state of the art in the industry," Siu says.
Kastner says Intel's 300-mm manufacturing capability provides it with a huge advantage over AMD, which isn't expected to move to 300-mm production until 2005.
"That may be one of the reasons the chips are so attractively priced on announcement day, which is something they have never really done before," he says. More typical of Intel's introductory pricing was the $700 price tag placed on its first 3-GHz chip with 800-MHz front-side bus, according to Kastner. Intel also may have felt pressure to provide a lower cost structure because the Prescott chips were delayed from their original anticipated introduction, he says
Siu declined to comment on continued rumors that Intel is working on a 64-bit x86-based processor line that would compete with AMD's 64-bit Athlon.
"Our position has always been that Intel will offer capabilities when the ecosystem, including operating system and other things, are there to support it," Siu says.
"The fact is 99.9% of all consumer users don't need 64-bit parts today," Kastner says, "primarily because there is no operating system to run it on."