Notice back on AMD'
Advanced Micro set to launch Athlon 650 MHz
By Janet Haney, CBS MarketWatch
Last Update: 12:31 PM ET Aug 8, 1999
Silicon Stocks
Hardware Report
SUNNYVALE, Calif. (CBS.MW) -- Struggling computer chip
manufacturer Advanced Micro Devices has said it's set to introduce its
Athlon 650-MHz microprocessor Monday, touting it as the world's
fastest chip.
In late June, AMD
began shipping the
Athlon, which is used in
PC computing systems,
in speeds of 500, 550,
and 600 megahertz.
"We are off to a good
start, shipping tens of
thousands of Athlon
(chips) in the just
completed quarter,"
said Chief Operating Officer W.J. Sanders during AMD's second-quarter
earnings conference call July 14. He noted at the time that the company is
"confident" it can produce 1 million Athlon chips in the fourth quarter. See
full story.
"On paper (Athlon) looks good, and on paper there's a lot of interesting
things going on in the microprocessor space," said Dan Scovel, a
semiconductor analyst at Fahnestock & Co.
"AMD now is no longer a threat at the low end,
however that K7 (Athlon) ... you could argue that
it's better than the fastest part Intel has to offer," he
said. "However, I would say it's pretty clear that it's
at least comparable and they're hitting to really the
sweet spot in the market that Intel serves."
"Notice is back on AMD," Scovel said.
Shares of the Sunnyvale, Calif.-based AMD rose 1 1/4, or 7.8 percent,
to 17 3/8 in Friday trading, and rival Intel (INTC: news, msgs) gained 1/8
to 71 9/16.
Advanced Micro Says PCs Using New Chip Will
Operate Faster Than Expected
By Anthony Effinger
Sunnyvale, California, Aug. 8 (Bloomberg) -- Advanced Micro
Devices Inc. said personal computers powered by its new Athlon
microprocessors will arrive in stores Aug. 16, running at faster
speeds than any of archrival Intel Corp.'s chips.
AMD said the new chip will operate at speeds as fast as 650
megahertz, better than originally planned. International Business
Machines Corp. and Compaq Computer Corp. will be the first to
offer personal computers running Athlon next week.
AMD is counting on Athlon to break into the market for
corporate PCs, workstations and servers, where price cutting is
far less severe than in the home PC market. AMD has been losing
money because Intel keeps slashing prices on its inexpensive
Celeron chip, a product it built specifically to combat AMD.
''If they can't make this fly, it's a big problem,'' said
Steve Baker, an analyst at PC Data Inc. in Reston, Virginia.
Athlon will run faster than anything Intel, the world's
largest computer-chip maker, is making now. The processor also
has a new design that will help it outperform Intel chips, even
when they run at the same speeds, AMD said. A chip's speed
indicates how fast it executes the functions of a computer.
The challenge for AMD is producing enough Athlons to meet
demand. The company has bungled new products before, and the K7
is by far the most complex chip it has ever made.
AMD plans to boost production to about 1 million Athlons in
the fourth quarter, said Scott Allen, a spokesman for the
Sunnyvale, California-based company.
Higher Prices
Athlon will sell for as much as $849 for purchases of 1,000
or more, compared with $220 for AMD's highest-priced K6 desktop
PC processor. The lowest-powered Athlon will list for $249.
Intel's most expensive processor, a Pentium III Xeon, sells
for $3,692. Its cheapest Celeron sells for just $67.
AMD says Intel is able to slash prices on Celeron because it
makes so much money on the Xeon processors, which go into
workstations and servers. Workstations are souped up PCs used for
design and engineering. Servers are the machines that run
computer networks, usually for corporations.
Athlon also marks one of the few times that AMD has a
processor that is more advanced than Intel's best. Usually, AMD
follows Intel with new generations of microprocessors.
Long an also-ran, AMD ambushed Intel last year when it
rolled out new versions of its K6 chip and lured big PC makers
with prices well below Intel's. The company returned to
profitability in the second half of last year as K6 sales surged.
Intel fought back this year with better versions of Celeron.
AMD's track record suggests that it may have a tough time
getting production of Athlon up to speed. The company was a year
late with the K5 processor in 1996, and it also struggled to get
its successor, the K6, to market. Design problems and production
glitches with the K6 left AMD with losses totaling $125 million
in 1997 and 1998.
AMD shares have fallen 40 percent so far this year, while
Intel shares have risen 21 percent. |
