Intel Bags Plan to Produce Cheap Chip - TheStreet

Intel

(INTC) - Get Report

capped off a memorable month Friday by saying it will scuttle plans to produce the low-end

Timna

microprocessor.

Intel saw Timna as a chip cheap enough for manufacturers of very cheap personal computers and other appliances. It would integrate the microprocessor core with both the memory controller and the graphics controller, and was designed to eliminate the need for graphics cards and the components that help chips communicate with dynamic random access memory, or DRAM.

Intel started working on the Timna chip in 1999, but it was forced by a memory-translator-hub problem earlier this year to delay its planned introduction in the first half of 2000. The last time Intel checked in with the customers for whom the chip was being designed, it was told they didn't need it anymore.

"Customers said that

the Timna was missing their window of opportunity," said Intel spokesman Michael Sullivan. He added that those same customers said that the 810 chipset that Intel has since released is also capable of integrating the memory and graphics controllers, and has thus become more cost-effective.

"We looked at the delay and the need, and said, this isn't really making sense," said Sullivan. "We can cancel that product and devote our resources to other high-priority programs."

That may be so. But the scuttling of the Timna will doubtless serve as fodder for those who have been criticizing Intel's management of its core business -- citing things like the August recall of some of the company's 1.13 gigahertz

Pentium III

chips and a move in May to replace about a million defective motherboards.

Analysts seemed too preoccupied with Intel's larger

revenue problems to worry about the Timna. "Timna missed its product window," said

ABN Amro

analyst David Wu. "Is it good to throw good money after bad? They already lost money on Timna. Nobody will ever miss it." (ABN Amro has no underwriting relationship with Intel.)