Intel to Unveil Cheaper Version of Its 486 Chip

By Stephen Kreider Yoder, Staff Reporter
The Wall Street Journal

Santa Clara, Calif. -- Apr 22, 1991 -- Intel Corp. today will unveil the newest addition to its popular line of computer chips, a device called the 486SX. The 486SX is a half-priced version of Intel's leading-edge 486 chip, and may become the "brain" of choice in personal computers.

The 486SX is an important stepping-stone for Intel, which wants to insure that its chips keep their dominant share of the PC market. By offering the low-priced SX, Intel hopes to woo PC makers from its older, more popular chip, the 386 line. The 386 line has dealt Intel fat profits for five years but faces competition from a 386 "clone" introduced in March by Advanced Micro Devices Inc.

"Intel would like to shift their product mix over to the 486 because they're the sole source" for the chip, said Michael Slater, editor of the newsletter Microprocessor Report.

Intel officials wouldn't discuss details of the new chip, only saying that the company plans to announce "a new member to the 486 family." But sources familiar with Intel's plans said the new 486SX is a slower, less sophisticated version of the 486 chip, which the company introduced in 1989 and will now call the 486DX. The SX runs at a speed of 20 megahertz, or 20% slower than the slowest 486DX, the sources said.

Although the 486DX runs many programs more than four times faster than the 386, it hasn't been a hot seller because its $581-and-up price tag is too steep for many PC makers. Intel's list price for the 486SX is $258 apiece.

The price is surprisingly close to that of Intel's fastest 386 chip, which sells for $208 but lacks important circuits called "cache memory" that the 486SX offers. According to an Intel memo sent to computer companies, the 486SX will run about 35% faster, yet be cheaper than, a 386 chip that is combined with cache-memory chips.

That means PC makers can use the 486SX to build machines as cheaply as today's slower 386 machines. The new 486SX machines will drive down PC prices sharply. Big PC makers such as International Business Machines Corp. and AST Research Inc., which already have received supplies of the new chip, are expected to announce 486SX-based machines later this week. AST plans to unveil tomorrow a bare-bones 486SX machine for just under $3,000, and to simultaneously slash by 24% the price of a machine using Intel's relatively slow 386SX chip, which will now sell for $1995. AST's new 486SX machine will cost 46% less than an AST machine using Intel's fastest 386 chip.

The 486SX will put price pressure on Advanced Micro's 386 clones, which sell for about the same as Intel's 386 chips, analysts said. "It's an excellent marketing move" rather than a technological one, said analyst William Tai of Alex. Brown & Sons Inc.

Indeed, the 486SX doesn't represent new technology at all. The chip is basically the same as the 486DX, but Intel has disabled circuits that comprise the "floating-point unit," which speeds up certain calculations but isn't essential for many common PC programs.

In another show of marketing savvy, Intel today also will introduce a so-called co-processor chip, which a PC user can plug into a machine to restore the functions that Intel has stripped out of the 486SX. Called the 487SX, the co-processor will list for $799, and is essentially a slightly altered 486DX. When plugged into its special socket in a 486SX machine, the co-processor will take over all the functions of the 486SX.

 

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