WSJ's spin:
Advanced Micro May Challenge
Intel With Athlon Microprocessor
By DAVID P. HAMILTON
Staff Reporter of THE WALL STREET JOURNAL
For the first time in years, Advanced Micro Devices Inc. may have a clear
technological advantage over rival Intel Corp. Now it has to hold onto it.
Monday, AMD formally unveiled its
high-end Athlon personal-computer
microprocessor, one that it claims can
outperform comparable Intel chips
operating at the same speed. What's more,
AMD's top-line Athlon will run faster than
Intel's fastest Pentium III processor,
clocking in with a speed of 650 megahertz
compared with 600 megahertz for Intel's
fastest processor.
The Athlon "really changes the whole
nature of the competition, giving AMD for
the first time ever a strong offering at the high end of its product line," said
Michael Slater, an analyst with MicroDesign Resources in Sebastopol, Calif.
"But its ability to execute remains to be seen."
That, in a nutshell, has been AMD's challenge for years. Time and again, the
Sunnyvale, Calif., chip maker has challenged Intel's lock on the
PC-microprocessor market, only to fall short due to its own mistakes and
aggressive Intel responses. At the launch of its K6 microprocessor in 1997,
for instance, AMD's fastest chip ran at 233 megahertz, compared with
Intel's fastest, a 200-megahertz chip. But "that lasted about two weeks"
once Intel responded, an AMD spokesman says ruefully.
AMD never regained its lead. After a
disastrous manufacturing problem that limited
its ability to produce its fastest chips in large
quantities, it was forced to slug it out with Intel
at the low end of the processor market. While
the resulting price war benefited consumers, it
was bruising for AMD, which last month
reported a record loss for the second quarter.
Even worse, Intel has started winning back
hard-won market share in the retail PC market
that AMD briefly dominated.
The Athlon is designed to change all that. For one thing, its speed advantage
is greater than was that of the K6, since Intel just announced its 600
megahertz Pentium III earlier this month. That alone could be crucial to the
Athlon's marketing acceptance, because PC makers that want to sell the
fastest systems in the market will, for now, have to use an AMD chip.
AMD also plans to create an family of souped-up Athlon processors that
can be used in high-end corporate PCs, workstations and servers -- a
lucrative market that has helped Intel subsidize its low-cost offensive against
AMD. By the beginning of next year, AMD plans to unveil the Athlon
Professional for high-performance PCs, and later in the first half plans to
launch the Athlon Ultra, for workstations and servers.
An Intel spokesman declined to comment on the Athlon launch.
AMD's success will hinge upon its ability to cheaply manufacture Athlon
chips in high volume. Intel's potent ability to retaliate remains an issue as
well. AMD, in fact, has already been forced to lower its Athlon prices -- it
had planned to sell the 600-megahertz Athlon for $699, but after Intel
announced a 600-megahertz Pentium III for $669, AMD cut its price to
$615. |
