IBM Stops Shipping Pentium PCs : Technology: Computer maker says chip’s flaw is worse than Intel has reported. Intel calls the action unwarranted.

Intel Corp.’s efforts to dispose of the controversy over a flaw in its Pentium microprocessor were dealt a severe setback Monday when IBM Corp. said it was suspending shipments of Pentium-based personal computers because it believes the bug is substantially worse than Intel has reported.

IBM’s announcement sent shudders through the PC industry, dragging technology stocks down in heavy trading on Wall Street and raising fears that consumers could grow wary of PCs in the midst of the industry’s best-ever holiday selling season. It also highlighted some of the difficulties computer companies face as they try to appeal to non-technical consumers, whose expectations are different from those of traditional computer buyers.

Intel denounced IBM’s decision as unwarranted, saying its own extensive tests showed no evidence of any increased probability of encountering the bug. Since the flaw was publicized by a Virginia mathematics professor in October, Intel has steadfastly maintained that the flaw is of no concern to anyone except a few mathematicians and scientists.

“You can always contrive situations that force this error,” Andrew S. Grove, Intel’s president and chief executive, said in a statement Monday. “In other words, if you know where a meteor will land, you can go there and get hit.”

IBM’s action is its second Pentium-related salvo in less than two weeks: On Nov. 30, the company offered to replace faulty Pentiums for customers who feared that their computations might go awry because of the bug, which can produce errors in some complex division problems. IBM’s double- barreled barrage is viewed by many in the industry as an opportunistic attempt to disparage Intel and garner support for its own PowerPC, a Pentium rival that IBM developed with Apple Computer and Motorola. Pentium PCs account for only a tiny portion of IBM’s sales. No other PC manufacturers followed IBM’s lead Monday.

But IBM denied any ulterior motives. “Our main concern was to respect the trust” of our customers, said Bill Pulleyblank, director of mathematical sciences at IBM’s research division in Yorktown Heights, N.Y. “We’re willing to take whatever are the consequences.”

IBM will sell Pentium systems on a case-by-case basis to customers who are aware of the flaw and feel comfortable that they will not be affected, spokeswoman Tara Sexton said. “If they want to accept the risk now, fine,” she said, noting that IBM would later replace the Pentium chips free of charge.

Computer makers such as Dell and Compaq, meanwhile, said they will continue to ship Pentium systems while they await replacement microprocessors from Intel containing a “patch” that fixes the bug. Widespread distribution of repaired Pentiums will begin in the first three months of 1995, Intel has said.

After IBM’s Monday morning announcement, the stocks of semiconductor and computer makers and computer retailers took a drubbing, though many edged back up in the afternoon. Intel closed down $2.375 at $60.375, IBM dropped 87.5 cents to $70.625, Dell slumped $1.25 to $39.625, and Compaq was off 87.5 cents at $39. Retailer CompUSA fell 50 cents to $13.375.

Intel has said a typical computer user using a spreadsheet and doing 1,000 divisions per day would notice a problem from the Pentium bug just once in 27,000 years. In its tests, however, IBM found that common spreadsheet programs, recalculating for 15 minutes a day, could produce errors as often as every 24 days.

Consumers have been buying PCs in record numbers for homes and small offices this holiday season, and many are particularly attracted to Pentium-based machines: The powerful chip makes them especially good for games and other multimedia programs. The popularity of on-line services and the global Internet has also boosted mainstream interest in computing.

In fact, fanning the Pentium controversy has been a spate of fiery electronic mail complaints on the Internet about Intel’s handling of the problem. Two weekends ago, Intel’s Grove took the unprecedented step of posting a statement on the Internet to defend his company’s strategy.

According to industry observers, this is the first time a high-tech flaw has received such a public airing on the Internet. The Internet’s role in spreading the news fast has been “quite astounding,” said Jeff Contompasis, senior quality assurance engineer at Simulation Sciences, a software company based in Brea.

Many Internet users were particularly incensed that Intel, based in Santa Clara, Calif., knew of the problem as early as last June but did not disclose it publicly until after its discovery by mathematician Thomas R. Nicely, a college professor in Virginia.

Intel has steadfastly declined to recall the 5 million or so Pentiums already on the market. It has said that any customer affected by the glitch will be sent a replacement at any time during the PC’s life. In the meantime, it is racing to produce bug-free chips in quantity.

To some, the Pentium controversy raises anew the debate about whether the high-tech industry, especially given its push into the home market, should develop a better set of quality-control standards for its equipment to reassure potentially wary customers.

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Portrait of the Pentium

Intel’s Pentium processor, introduced in March, 1993, represents the fifth generation in a line of microprocessors that dates back to 1979 and the original IBM PC. While the fourth-generation chip, the 486, is currently the chip of choice for personal computers, the more powerful (and more expensive) Pentium is expected to overtake the 486 by the end of next year. An overview of the Pentium marketplace:

PENTIUMS SHIPPED

In millions of chips:

1993: 0.2

1997: 40.0*

1999: 25.0*

* Advanced Micro Devices, Cyrix, and others are expected to begin shipping Pentium-compatible chips in 1995. Sales projections for those “clones” are included for 1995 onward.

486s SHIPPED

Includes Intel-compatible chips from other manufacturers. In millions of chips:

1993: 30.6

1994: 45.6

1999: 3.1

Note: Figures after 1994 are projections

PROCESSOR MARKET SHARE

Based on 1994 total shipments of 62.9 million chips:

Pentium: 6.5%

486: 72.5%

386: 7.0%

Motorola 68000 (Apple): 11.3%

Risc (Power PC, Sun): 2.7

HISTORY OF INTEL PROCESSORS

Type Date introduced Transistors* 8088 June, 1979 29,000 286 Feb., 1982 134,000 386 Oct., 1985 275,000 486 April, 1989 1,200,000 Pentium March, 1993 3,100,000

* The most transistors, the faster and more powerful the processor.

Sources: Mercury Research; Intel Corp. Researched by ADAM S. BAUMAN / Los Angeles Times