Chips off the new block: Intel's Pentium is challenged by AMD, NexGen and Cyrix.

After the controversy surrounding flaws in its Pentium microprocessor, Intel made adjustments and boosted its revenues by 31% last year. Now the world's largest chip maker seems to be on a roll--poised for another upswing in revenues thanks to its new and even faster P6 chip. Has Intel cornered the market?

Not so fast. Three small chip makers are looking to put an end to Intel's dominance of the high-end microprocessor market. By year-end, NexGen's Nx586, Cyrix's M1 and Advanced Micro Devices' (AMD) K5 microprocessors could be the chips of choice for a number of computer manufacturers. So what will really be inside the computers that will be in stores later this year?

In the past, you had only one choice when you went to buy a new computer: All computers shipped with an Intel microprocessor. The microprocessors offered by the upstart chip makers perform as well as or better than the Pentium--and at lower prices. The new chip makers were able to make substantial advances by studying Intel's mistakes with the Pentium chip. The results offer high performance and "binary compatibility" with Intel's Pentium chip. Users can confidently run the same applications on the newer chips that they could on a Pentium.

The early assessment is that it's a win-win situation for the consumer.

NEXGEN Nx586-P90

NexGen is the only company that has a Pentium alternative currently available. The NexGen Nx586-P90 processor is comparable to the 90-MHz Pentium processor from Intel.

While the NexGen chip offers the compatibility that users are looking for, it uses a slightly different process than AMD and Cyrix chips. The NexGen processor is the only one of the three Pentium competitors that does not offer "pin compatibility," a feature that allows a chip to be physically installed in the same slot that the 386, 486 or Pentium chip currently fills. NexGen processors are manufactured and licensed to NexGen by IBM's microelectronics division. Due to this complicated licensing agreement, all computers using the Nx586 must have a motherboard specifically designed for the NexGen chip. Users will still gain a power/value advantage with the chip. The question is whether computer manufacturers will design and build a second type of motherboard to support the NexGen chip.

CYRIX M1 AND AMD K5

The Cyrix M1 and the AMD K5 are very similar, and most industry observers feel they hold the best opportunity at stealing market share from the Pentium chip. Cyrix was the first manufacturer to offer a 486 chip done. Arguably, the introduction of Cyrix's 486SLC class chips forced Intel to move up the deadline for the introduction of the Pentium. Of course, AMD did its part as well. Computer makers Compaq, Acer and Digital use AMD 486 chips in models they are shipping today.

AMD is preparing to deliver a binary-compatible, pin-compatible 100-MHz K5 Pentium alternative chip later in the year. AMD claims the K5 will outperform 100-MHz Pentium chips by 30%.

Cyrix's M1 offering is also a binary-compatible, pin-compatible chip that is expected to run at 100-MHz and outperform the best Pentium chips by 30%. Unfortunately, at press time, Cyrix hadn't nailed down when it expected to actually ship the chips. Prices for the Cyrix chip and the AMD chip were also unavailable.

The pin compatibility of the K5 and the M1 give them an advantage over NexGen. This lowers manufacturers' costs and makes them easier replacements for Pentium chips.

As chip manufacturers continue to introduce faster chips in their battle over the marketplace, computer prices will continue to drop and consumers will benefit. So let the chips fall where they may!