The Pentium III 1.13GHz recall was a bloodied nose for Intel. Not only did they lose the speed crown, they lost face. Fortunately for Intel, they didn't lose massive amounts of money simply because there weren't too many CPUs in the hands of Intel's customers or their customers' customers. We have seen Intel's consumer chipset validation program and were quite impressed with its thoroughness, and we expect that Intel's processor validation is on the same level, but both programs have let major flaws through. It looks like Intel needs to do some analysis of their validation methodology.
With the 1.13GHz recalled, where will Intel go now? Likely before the end of 2000, Intel will resume shipment of the 1.13GHz model, where it looks like the .18 Pentium III will max out. In Q3 2001, Intel will release Tulatin, a .13 micron version of the Pentium III sporting 512k of L2 cache. Tulatin will start at 1.26GHz, and will likely make 133MHz jumps from there. The move to a .13 micron process should give the Pentium III plenty of headroom. The move from .25 to .18 took the Pentium III from 600MHz to 1.13GHz over time. The move from .18 to .13 might someday bring the Pentium III architecture to 2GHz.
Do keep in mind that, when Tulatin ships at 1.26GHz, by then the Pentium 4 should be shipping at 2GHz. The Pentium III still has some legs left, but it will be driving along at a good clip while the Pentium 4 is melting the tarmac.