SANTA CLARA, Calif. -- As the Nov. 20 launch of the Pentium 4 nears, Intel Corp. is priming the pump by shipping limited quantities of the new microprocessor bundled with Direct Rambus DRAM, according to industry sources.
Though Intel exited the DRAM market years ago, the company is shipping a discounted package of pre-launch Willamette-class Pentium 4 chips with Rambus memory to motherboard makers, distributors, and resellers, sources said. The program is intended to lay a foundation of systems -- mainly workstations and high-end PCs -- by offsetting the high cost of Direct RDRAM.
At introduction, the Pentium 4 chips themselves are expected to be pricey, selling for $950 to $975 for a 1.4-GHz version and more than $1,000 for a 1.5-GHz chip. Spot-market prices for 64-Mbyte, 800-MHz RIMMs are running $200 to $250, compared with about $58 for a 64-Mbyte PC133 SDRAM DIMM.
"We'll price the Pentium 4 processor precisely as necessary to get it in the volume desktop marketplace," said Intel president and chief executive Craig Barrett, queried during a press briefing this week in Taiwan about Pentium 4 incentive programs.
A company spokesman declined to comment specifically on the Pentium 4/Direct RDRAM bundling program, but said, "Intel has long combined products in a variety of marketing packages to meet the different needs of the market."
Intel already is providing OEMs an incentive to move to the Pentium 4 by offering a $70 rebate per chip. Though the move is expected indirectly to help systems makers offset Rambus prices, Pentiums bound for OEM customers will not include DRAM, sources said.
The Rambus memory-bundling program is aimed at pushing the Pentium 4 into the workstation and more price-sensitive, upper-end PC-desktop market. In the latter segment, so-called power users are expected to be among the early Pentium 4 adopters, although Intel is striving to expand beyond this niche market to boost sales volume.
Intel in Santa Clara is also planning to introduce a less costly mainstream desktop Pentium 4, code-named Northwood, in the third quarter of 2001. To meet market-cost requirements, the processor will use either single-data-rate or double-data-rate SDRAM.
Intel's P4/Direct RDRAM bundling program marks one of the first instances in recent history that the company has re-entered the commodity DRAM sales channel -- even if only in a limited way. In the early '90s, Intel was a major DRAM buyer and resold the chips in motherboards and PCs assembled for OEMs. In fact, the company was blamed for helping to start a DRAM pricing free fall when in the mid-'90s it suddenly stopped putting memory on its boards and PCs and dumped huge amounts of inventory into the market.