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Intel reports chip flaw
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June 25, 1998: 3:15 p.m. ET
Company says bug found in Xeon chip won't delay its Monday debut
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NEW YORK (CNNfn) - Shares of Intel Corp. slipped in Thursday afternoon trading after the company confirmed it had found a bug in its high-end Xeon processor.
The company said that while the flaw won't delay the debut of the Xeon Pentium II processor, scheduled for Monday, it will delay the release of some servers designed to use the chip.
Intel (INTC) shares fell 1-5/16 to 76-1/16 in mid-afternoon trading.
Intel said the problem exists in conjunction with its upcoming 450NX chip set, which is used to design servers that can run four processors at once.
Chuck Mulloy, an Intel spokesman, said the company will ship the Xeon with its 440GX chip set, which allows servers to run two processors simultaneously.
Intel said it won't release the technical details of the bug until the Xeon is officially announced Monday, when it also will disclose a workaround solution to the problem.
Mulloy added that Intel expects to ship Xeon with the new chip set by mid-July.
Several server manufacturers were scheduled to release products timed with the release of the Xeon chip.
Hewlett-Packard Co. (HWP) said its plans to ship a Xeon-based server remain on track, though it didn't specify whether the product was designed to operate with the newer chip set. Other manufacturers couldn't be reached for comment.
The Xeon bug is the second technological snafu to hit the chip maker in the past 30 days. In late May, Intel said it would have to delay production of its much-anticipated Merced chip by at least six months.
Both the Xeon and Merced are high-priced chips that Intel has banked on to bring in high margins, which have suffered somewhat because of its increasing dependence on developing processors for sub-$1,000 PCs. 
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Intel
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