IBM Halts Shipments of Pentium-Based Personal Computers Based on Company
Research

SOMERS, N.Y., Dec. 12, 1994 . . . IBM today announced it has stopped
shipment of all IBM personal computers based on the Intel Pentium*
microprocessor. The action is based on tests conducted by the IBM Research
Division stimulated by growing customer concern that Pentium-related
problems are more frequent than previously estimated.

Results of IBM Research Division tests indicate that while Intel's
descriptions of the flaw are technically accurate, there are many customer
situations in which the risk of error may be significantly higher.

IBM is working with customers on interim solutions and will resume
shipments upon customer and business partner request. Also, IBM is:

-- Sharing its analyses with customers and the industry on the
   Internet.

-- Working with IBM customers to help guide them in their own
   specific risk assessments.

-- Providing for replacement of flawed Pentium chips at no cost to
   customers. This applies to all its Pentium-based PCs, either those
   already installed or systems that will be shipped prior to new
   chips being available.

-- Working with Intel to help resolve Pentium-related problems as
   quickly as possible.

"We believe no one should have to wonder about the integrity of data
calculated on IBM PCs," said G. Richard Thoman, IBM senior vice president
and group executive. "Many of our customers have indicated concern since
the Pentium flaw was disclosed. We've conducted our own tests and
concluded that the risk of error is significantly higher than previously
thought and warrants today's actions."

Intel has said that in purely random situations the likelihood of a
customer encountering an error is only once in 27,000 years and that
off-the-shelf software is not affected. However, IBM tests indicate that
common spreadsheet programs, recalculating for 15 minutes a day, could
produce Pentium-related errors as often as once every 24 days. For a
customer with 500 Pentium-based PCs, this could result in as many as 20
mistakes a day.

Pentium-based systems currently shipped by IBM are the ValuePoint P60, the
IBM PC 300 P60 and 700 P90, the Aptiva 710 and 730 models and IBM PC
server models 85, 95, 300 and 500.

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