Video, Flash Memory The `Other' Intel Is Cooking

Intel may mean microprocessors, but its other products are making a name, too. On a visit to Fiji a few years ago, Intel Corp. President Andrew S. Grove met a computer installer. "Oh, yes," said the islander--and recalled buying Intel circuit boards that add to a computer's memory.

The "other" Intel hardly adds to profits now, but it's a ticket to the future. Intel's sales of supercomputers, flash memories, video chips, and networking boards are climbing an average of 68% a year, says Robertson, Stephens & Co. analyst Daniel L. Klesken. And that's not their only value.

Once, Grove saw such business as a hedge against the cycles that whip the chip industry. Not anymore, he says. Now, he counts on other products to keep Intel on technology's cutting edge. That's vital, since Grove wants to make his microprocessors the heart of the computing universe. If one chip equals yesterday's mainframe, a chip quartet hums like today's--and an orchestra can outperform the best from Cray Research Inc. And as technology moves from these computers down to microprocessors, Grove believes that will revive the glory days of personal computers.

VIDEO ERA. Grove is especially keen on PCs that handle moving pictures. Data bases could then be enlivened with sight and sound, and educational software could become as engrossing as TV. For now, the amount of information contained in "full-motion video" images overwhelms microprocessors. Intel's solution is called Digital Video Interactive (DVI). By ignoring data that don't change in successive frames, DVI chips can compress data in video images by 20 times.

Last October, Intel introduced DVI add-on boards that let PCs play back and manipulate video. Tim Bajarin, president of Creative Strategies Research International Inc., a market researcher, calls DVI the "cornerstone of a new era in computers." By the mid-1990s, Intel expects to add DVI to its everyday microprocessors.

Grove is focusing as well on portable computers, a PC industry bright spot. He thinks sales would perk up more if laptops were smaller and lighter. That's where flash memory comes in. Like the random-access-memory chips that Intel invented, flash memories can be erased and rewritten quickly. But unlike standard memory chips, they retain data when a computer is off. That makes them an ideal storage medium for portable PCs. Intel has just unveiled a flash card that holds 20 megabytes of data, equal to 13 3 1/2-inch floppy disks, and a 40-megabyte version is near. Market researcher Dataquest Inc. expects flash memories to be a $1.6 billion market by 1995. Flash chips are already used in car electronics, instruments, and military systems, and Intel has 85% of that $130 million business.

MULTIPLE SMARTS. Intel is also carving out a leading role in massively parallel computing, which experts believe will be the next wave in supercomputers. Systems built around hundreds of microprocessors are already helping pioneers in the oil, chemical, and aerospace industries cope with intractable problems. Intel owns one-third of the $270 million market for massively parallel computers and has sold 325 systems, more than any other supplier.

The company's experience with all these products should eventually show up in better microprocessors. The future, Grove adds, belongs to PCs that require little or no special training to use. This will take a new breed of chip with the smarts to handle video and sound as adroitly as Intel brains now handle other data. So even if the other Intel never makes a fortune, it seems likely to earn its keep.

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