Intel Offers a 32-Bit-Microprocessor

Intel Offers a 32-Bit-Microprocessor

By Andrew Pollack
Special to the New York Times

San Francisco -- October 16, 1985 -- The Intel Corporation today formally entered the competition to supply advanced microprocessors, the computer chips that will be the basis for the next generation of desktop computers.

Intel's new chip, known as the 80386, can handle 32 bits of information at a time, both in doing calculations and transmitting data. That is twice as much as the current generation of microprocessors.

Intel, which is by far the leader in supplying earlier generations of microprocessors using 8 bits and 16 bits, is a latecomer to the 32-bit market, following one and a half to two years behind the current leaders, Motorola Inc. and National Semiconductor. Many other companies, including several Japanese manufacturers that have not designed their own microprocessors before, are expected to try to make a grab for the market, because the 32-bit chips are expected to be the heart of computers well into the 1990's.

Computers based on the 32-bit microprocessors will handle huge amounts of information, work with blinding speed and have dazzling graphic displays. The new chips by Intel and its competitors promise to lead to desktop computers as powerful as some larger computers today that sell for more than $100,000.

''They recognize that the 32-bit chip is the last window for a long time,'' said Mel Thomsen, associate director of the semiconductor industry service of Dataquest Inc., a market research concern.

But Intel has a significant advantage. Its current microprocessors are used by the International Business Machines Corporation in its personal computers, and by all the manufacturers of computers compatible with the I.B.M. machines. And it is likely that I.B.M., which owns 20 percent of Intel, will choose the new chip as the basis for future personal computers because computers based on the new Intel chip will be able to run software written for the older machines.

''This product is born a winner because it's not starting from scratch,'' said Andrew Grove, the president and chief operating officer of Intel, which is based in Santa Clara, Calif. ''It's starting with a huge base of software.''

I.B.M. would not say when, or even if, it would introduce such computers but analysts speculate it might come as early as next year. Dr. Grove said at a press conference that I.B.M. is one of 30 companies developing products that use the new chip. I.B.M. said in a statement today that it is committed to having its future personal computers remain compatible with existing ones, strongly suggesting that future machines would use the new Intel chip. But the statement added, ''While its use in an I.B.M. PC product is not expected in the immediate future, we look forward to exploring its potential.''

Microprocessors are the ''brains'' of a computer, directing the operations of other parts of the machine and performing most calculations.

The 80386 and other full 32-bit chips - those that both calculate and transmit in 32-bit chunks - are expected to be used initially in powerful desktop computers for such tasks as product design. Eventually they will be used in office computers, as well as in robots and telecommunications products.

Still, the market will be slow to develop, because it will take several years for companies to design products to use the new chips. Dataquest estimates the sales of such chips will rise from only $17 million this year to $195 million in 1990, but even at that time it will be far smaller than sales of 16-bit processors.

For Intel, which Dr. Grove said had spent $100 million in development of the new chip family, success is crucial. The company invented the first microprocessor in 1971 - a 4-bit chip used in calculators - and, helped by I.B.M., has dominated the market ever since. Microprocessors and micro-controllers, a closely related product, account for roughly 40 percent of Intel's revenues, which in 1984 totaled $1.6 billion.

Microprocessors are also thought to be relatively profitable because they have not yet been subject to stiff Japanese competition. Intel last week reported a third-quarter loss of $4 million, its first since 1971, and said it would stop selling random access memory chips, a market that has been taken over by Japanese suppliers.

Intel has already stumbled once in the 32-bit arena. In 1981 it introduced a microprocessor, known as the 432. But the product was so complex, many industry executives say, that customers could not figure out how to use it and the product failed.

The new Intel chip will sell for $300 initially and will be available in volume quantities in the second quarter of next year. The chip itself is technically awesome, containing more than 275,000 transistors, making it among the most complex chips yet developed. It can operate at 3 million to 4 million instructions per second, twice as fast as the 80286, and can directly manage information storage in a computer with 4 billion characters of internal memory. By contrast, most personal computers today have only 256,000 or 512,000 characters of memory.