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Chip Wars Mean Good News for Users

-- by Diganta Majumder

Time was when the chip market was positively boring-Intel got the pie, and its rivals got the crumbs. Not any more.

From product releases to pricing strategies to corporate acquisitions, the activity in this once-dormant arena grew fast and furious this summer. And that means your wallet will be in for some relief.

Microprocessor giant Intel started the ball rolling with deep price cuts on Pentium MMX chips. The 200MHz version, for example, dropped to $252, a 49 percent cut. Similarly, the price of the 150MHz MMX chip for laptops fell 46 percent to $125.

At first, the cuts were confined to the Pentium series which, even with all the bells and whistles that MMX brings to the table, is now the low end-exactly the arena in which smaller rivals Advanced Micro Devices and Cyrix keep turning up the pressure. Soon, however, Intel slashed the price of its top-of-the-line Pentium II 300MHz chip 57 percent, giving it an $851 price tag. While these cuts are earmarked for PC manufacturers making volume purchases, users should see some savings as early as this fall.

Matching Cuts

Meanwhile, AMD, which has stirred up interest with its K6 series, insisted that its product line will remain at least 25 percent less expensive than Intel's. To that end, the company announced plans to cut prices of its 166MHz and 200MHz products almost in half. Even the price of a brand new 233MHz offering has been trimmed by more than a third.

Finally, Cyrix got in the game with some price cuts on its 6x86MX line. The PR166, 200 and 233 versions can now be had (in volume) for $105, $188 and $290, respectively.

But it isn't just price cuts making the news. Intel also acquired Chips and Technologies, which leads the market for notebook graphics accelerator chips. Chips and Technologies has also won plaudits for its HiQColor technology, which works with graphics accelerators for portables and flat panel displays.

The $500 PC

Here, too, Cyrix made news: It merged with National Semiconductor, with a goal of developing system-on-a-chip technology for PCs, NetPCs and "information appliances." Specifically, the company plans full-featured PCs for less than $500.

All in all, chipmakers are likely to face some rocky times ahead. Users, meanwhile, can just sit back and enjoy.

Windows Magazine, October 1997, page 52.

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