Speed limitations in Intel's Pentium architecture appear to be causing problems for the company. Intel, which was already having difficulties competing with archrival AMD in the low end of the microprocessor market, seems to be struggling at the high end as well. For Intel and AMD, the race to 1GHz was a close one, but AMD's first-generation Athlon chip beat Intel's 1GHz Pentium III chip to the punch. All Intel's high-end releases during the past 12 months have suffered from supply shortages and questionable end-user benefit, but with the August 2000 release of the 1.13GHz Pentium III chip, the company ran into a true public-relations disaster.

The debacle began on August 1, 2000, when Intel introduced its 1.13GHz Pentium III chip—even though the 1GHz Pentium III chip was in short supply with no relief in sight. At the time, analysts accused Intel of trying to deflect interest in AMD's 1.1GHz Athlon (formerly code-named Thunderbird), which AMD released on August 28. Before this version, the Athlon's capabilities had lagged behind same-speed designs from Intel, but the new generation overcame these limitations: The 1.1GHz Athlon sports a new socket-based interface and larger caches than the previous version.

Like the 1GHz version, Intel's 1.13GHz Pentium III chip was available only in extremely limited quantities. But this chip had other problems, which hardware-enthusiast Web sites reported immediately. Tom's Hardware Guide, for example, accused Intel of releasing a buggy chip that crashed under certain conditions. Throughout August, Intel denied any problems with the chip and continued to supply it— albeit in limited numbers—to customers buying PCs from major vendors such as Dell Computer. But Intel was able to duplicate the 1.13GHz chip's reported problems, so the company pulled the product from the market only 1 day after AMD released its 1.1GHz crown. Once again, AMD had pulled ahead.

Intel's problems stem from extending an aging architecture. The Pentium III processor features the same P6 processor core that debuted years ago with the Pentium Pro processor, whereas the Athlon features a new design with plenty of headroom. Even with Intel's recent problems, however, the future looks bright. Intel plans to release a faster version of the Pentium III processor, code-named Tulatin, in early 2001. Tulatin will feature a 0.13-micron die, which is smaller and cooler than the current generation's 0.18-micron die. And Intel's Pentium 4 processor, which features a new processor core that sets it apart from earlier Pentium products, will debut in late 2000, as will Intel's 64-bit Itanium (formerly code-named Merced).

For now, however, Intel has some damage control to do. And AMD is offering customers an alternative when buying new PCs.