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How did Intel get it so wrong?

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Analysis Chipzilla is keeping a brave face on things in the face of shortages of Pentium III processors that seem to be pushing its customers into the arms of AMD. So what's gone wrong in Chipzilla Centrale? Chatting to a colleague here, he suggested that perhaps the real problem is that for once, the fire drill isn't a drill. And it isn't. For the first time ever, since AMD and Intel engaged in fisticuffs, the chip contender has got the champion on the run, and appears to be knocking the stuffing out of him. This all, of course, must put an end to any talk that Intel is a monopoly. The last six months, since AMD Athlon chips started leaving the fab, have seen the company knock nine out of the ten major PC dominoes down. We'll leave aside here the question of whether the Athlon 800 is faster than the Pentium III 800, and those nagging questions of scaleability, although we shall return to these questions later on this week. This is not about chip architecture, it is about chip marchitecture, and it's also about an inflexion point in the industry. Andy Grove, who gave up day-to-day running of Intel a couple of years back, wrote his now famous Only the Paranoid Survive, on the basis that Intel got caught short by the FDIV bug in the Pentium. All businesses, he argued in that cogent book, have inflexion points and ought to recognise them before they happen. Intel, with the massive resources it has, must have had voices telling the powers that when AMD took over Nexgen, it was doing something a little more than just being a company that mopped up on its aftermarket. With that acquisition, it bought in good technology and some good technologists capable of executing on their chip dreams. Instead, it seems that Intel sat on its laurels and thought that the big machine would just carry on doing that big mechanical thing. The document we published yesterday demonstrates that fighting fires is not the best way to react when things are going wrong. Instead, conditions should be such that no flames ever get near tinderwood. ® Intel confirms huge Pentium III shortage

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