NEWS: New York Times on Pentium

[Tucker Balch]

Newsgroups: comp.sys.intel
Subject: New York Times: 12/19/94
Date: 19 Dec 1994 11:00:09 -0500

INTEL FACING A GENERAL FEAR OF ITS PENTIUM CHIP

By LAURIE FLYNN

A major New York City bank says it has discovered calculation errors that
it attributes to the Pentium chips inside some of its computers.

A multimedia developer and training company on Long Island says the
Pentium caused a miscalculation in a graphics program, although the error
was discovered before the program was shipped to customers.

Scientists at the Brookhaven National Laboratory on Long Island got wrong
answers in calculating the impact of colliding subatomic particles,
Newsday reported.

Intel Corp., which makes the chip, says it has found only one instance in
which the Pentium miscalculated - not one of the above cases.

Each day now, the calls mount to Intel, whose Pentium is the engine of
more than three million personal computers already in use. Some callers
say they have found calculation problems with the Pentium; many more say
they are fearful that such problems will disrupt their work.

Some retailers said Sunday that sales of Pentium-based computers were
dropping.

Despite several thousand phone calls a day, Intel continues to say that
concern about the Pentium chip is overblown, that the glitch affects only
those users performing certain highly complex mathematical calculations,
and that the computer user would encounter it only once in 27,000 years of
average use.

Others are not so sure, including IBM, which announced last week that it
would suspend sales of all computers that use the Pentium chip. IBM said
it found that the error could occur far more frequently than Intel says,
as often as once every 24 days for an average user.

At the New York bank that says it found Pentium-based miscalculations, a
senior executive agreed to discuss the problem only if he were not quoted
and the bank was not named. He said the bank's test had found that the
inaccuracies could occur more frequently than Intel says.

The executive said the bank was working quietly with Intel to receive a
quick replacement of the chips.

Others, however, have decided not to wait. At Computer Channel Inc., a
multimedia developer and training company in Syosset, N.Y., two Pentium
computers were returned to the manufacturer after a miscalculation was
found in a graphics program, said a manager, Tony Clark. He said the
company had replaced them with Macintosh computers made by Apple Computer
Inc., which does not use Intel microprocessors in its machines.

"We can't afford to be down at all," Clark said.

With more than two million Pentium chips already shipped and more in the
pipeline, Intel is standing fast against a general replacement. The
company says that computers using the Pentium continue to sell well, and
that computer makers that use its chip have not seen a rise in returns,
either.

Howard High, an Intel spokesman, said the company had seen only one
confirmed instance of the flaw causing a miscalculation.

High said Intel would give a new chip to any Pentium owner who wants one,
without charge. Because of high demand, he said, the company is first
giving the chips to the users it views as most at risk. Even for those
with urgent need, he said, replacement would take two weeks.

"We want people to be happy with their purchase of a Pentium-based PC,"
High added. "We think it's an outstanding product."

At J&R Computer World in New York, two Intel representatives were in the
store Sunday to answer customers' questions. But sales of Pentium-based
machines still fell markedly from those in previous days, James Ryall, a
salesman, told Bloomberg Business News.

Yet it is clear that while some Pentium problems are cropping up, fears
are growing exponentially.

Aside from some Pentium users' telephone calls to Intel, the company faces
a number of lawsuits: eight product liability lawsuits have been filed
against the company, as well as two suits from shareholders.

High of Intel said the suits were without merit.

Florida Attorney General Robert A. Butterworth has asked Intel to turn
over its information on the Pentium chip and to explain how it intends to
address consumer concerns, saying that many businesses, schools, state
agencies and individuals had bought computers containing the chip.

In a letter sent Friday to Andrew S. Grove, Intel's president and chief
executive, Butterworth said there was "substantial confusion" over the
reliability of the chips and the company's policy for replacing them.

He asked Intel to disclose how it would set priorities for replacing
flawed chips and to explain why it was telling consumers that it must
reserve $1,000 on their credit cards to insure that they send the replaced
chip back within 30 days.

Deputy Attorney General Pete Antonacci added: "It's coercive and
unnecessary. They've got to stop acting like a rinky-dink two-person
operation in a garage and start acting like the major corporation they
are."

A significant sign of rising concern was an announcement Friday by Gartner
Group, a high-technology consulting firm based in Stamford, Conn., that
advises many Fortune 500 companies, recommending that its clients delay
purchases of Pentium-equipped computers.

"Because of the extent of the problem, for the large corporate buyer the
best bet is just to wait till Intel ships the chip that is defect-free,"
said Leslie Fiering, vice president for personal computing strategies in
the Gartner Group's Santa Clara, Calif., office.

Others who are concerned include Aerospace Corp. of El Segundo, Calif.,
which put off buying additional Pentium-based PCs after the flaw was
discovered. The company has already received some replacement chips, which
it is testing against the older Pentiums in its labs, said Lorraine Junge,
a senior member of the technical staff.

"I don't care if it's a billion years," Ms. Junge said of the probable
incidence of a miscalculation. "We cannot tell our customer, the American
military, that there may be a problem with the work we're doing."

At Price Waterhouse, the huge accounting and consulting firm, only a few
hundred of the roughly 12,000 computers have the Pentium chip, and only a
small number of those are used by accountants and others who do complex
calculations. Still, the company is concerned.

"I'm nervous about what the real impact is," said Sheldon Laube, national
director of information and technology at the Price Waterhouse Technology
Center in Palo Alto, Calif. "People expect that if computers can do
nothing else, they can add, subtract and divide. This shakes people's
confidence."

Laube said he was leaving it to the company's employees to determine
whether any work needed to be recalculated.

The Pharmaceutical Manufacturers Association, a trade group in Washington,
has warned members not to use Pentium-based computers to calculate medical
data sent to the Food and Drug Administration. It expresses concern that
the safety of new drugs might be called into question.

Intel's stock closed Friday at $59.50, down $3.25 for the week on Nasdaq
volume of more than 46 million shares.