Flaw Detected in Intel's Newest Chips (Breakfast News) December 2, 1999


Thursday, December 2, 1999

"It is the bold man who every time does best, at home or abroad."
-- Homer

Flaw Detected in Intel's Newest Chips

By Richard McCaffery (TMF Gibson)

Microprocessor and component maker Intel (Nasdaq: INTC) has detected a possible flaw in its latest computer chip that prevents a small number of computers from booting up on the first attempt, Bloomberg reported.

Intel shares fell $1 to $75 1/4 in European trading.

Because of the defect in Intel's Coppermine family of Pentium III chips, PC maker Dell Computer (Nasdaq: DELL) halted delivery of some computers while it runs tests. It expects to resume shipping in a few days.

Meanwhile, Intel is notifying customers, but because the defect has been observed in 1% to 2% of the chips and has occurred only in Intel laboratories, the company is continuing to ship computers outfitted with the chips.

Intel expects to have the problem ironed out before it starts manufacturing the next batch of Pentium III chips. These computer chips, some of which run at 733 MHz, were shipped October 25 as part of a batch of Pentium III and Pentium III Xeon processors. It was Intel's broadest product shipment ever. All of the chips -- made for desktop, mobile, server, and workstation products -- were built using 0.18 micron technology, the industry's latest and greatest technology. They represent Intel's fastest chips to date.

The glitch comes as Intel battles rival Advanced Micro Devices (NYSE: AMD) for the microprocessor speed crown. Last week, AMD shipped its 750 MHz Athlon chip, the fastest microprocessor commercially available today. The chip is AMD's first product made with 0.18 micron technology, which works faster, costs less, and consumes less power than 0.25 micron technology. Both Compaq Computer (NYSE: CPQ) and IBM (NYSE: IBM) are shipping boxes with the latest Athlon chips.

News to Go

Online services leader America Online (NYSE: AOL) and job search website service, a subsidiary of TMP Worldwide (Nasdaq: TMPW), announced a $100 million agreement to bring the Monster's services to AOL's 19 million members. will become the official job search service on AOL, AOL Canada, AOL.COM, CompuServe, ICQ, Netscape Netcenter, and Digital City.

Golden Restaurant Operations, a subsidiary of world-leading fast food chain McDonald's (NYSE: MCD), has stepped in with a $173.5 million offer to buy struggling Boston Chicken (OTC: BOSTQ). Under terms of the agreement, McDonald's will obtain 751 Boston Market restaurants and franchise rights to an additional 108, as well as certain related liabilities. The sale will be part of Boston Chicken's Chapter 11 reorganization.

Carnival Corp. (NYSE: CCL), the world's number one cruise ship company, tendered a $1.7 billion hostile bid for NCL Holdings ASA (NYSE: NRW), the world's fourth largest cruise ship operator. The offer, a 32% premium over NCL's closing price November 30, was quickly rejected by NCL as inadequate.

Media and entertainment company Ascent Entertainment Group's (Nasdaq: GOAL) $461 million agreement to sell its Denver Nuggets and Colorado Avalanche sports franchises to a group controlled by Donald Sturm terminated yesterday after Sturm couldn't work out a deal with the city of Denver.

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