Ashok speaks again:
ragingbull.com
AMD Set To Make A Move Into Business Market -- VENDOR PLANS ITS FIRST TWO-WAYCHIPSET AND SAYS IT'S CLOSE TO SEALING DEALS WITH TOP PC MAKERS
Sat Apr 15 00:39:00 EDT 2000
Apr. 14, 2000 (InformationWeek - CMP via COMTEX) -- Emboldened by spectacular growth in its processor business, chipmaker Advanced Micro Devices Inc. said last week it will take on Intel in the market for business desktops and servers.
AMD has outlined this course before, but this time the assertion has more credibility: The vendor has plans to deliver its first two-way chipset and says it's close to sealing deals with top-tier manufacturers to use its processors in their business PC lines.
Last week, the company reported record earnings of $189.4 million, or $1.15 per share, for its first quarter ended April 2, compared with a net loss of $128.4 million in the year-earlier period. Wall Street analysts had been expecting per-share earnings of 57 cents, according to a survey by First Call. Meanwhile, AMD's first-quarter sales revenue for all its products, which include CPUs, flash memory, and network controllers, jumped 73% from one year ago, coming in at $1.09 billion. Processor sales alone grew by 65% over the first quarter of 1999.
AMD is hoping the momentum will carry it into markets that it has been unable to penetrate. Speaking on a conference call, AMD chairman and CEO Jerry Sanders said that by year's end the company will begin producing a two-way chipset that supports dual-processor configurations, making AMD chips viable for PC server manufacturers. "We expect to have some penetration in the server market by the end of the year," Sanders said.
AMD shares have gained strength of late on rumors that the company is in supply discussions with Dell Computer, which uses Intel chips exclusively. But a Dell spokesman said last week that the company has no immediate plans to use AMD
chips.
Sanders also said AMD remains on track to ship a processor running at 1.5 GHz by mid-2001. AMD's most powerful processor is Athlon, which has the same 1-GHz rating as Intel's fastest Pentium III chip. AMD plans in the fourth quarter to ship a chip, code-named Mustang, with 2 Mbytes of on-board Level 2 cache, equalling what Intel currently offers on its high-performance Pentium Xeon chips.
Still, some analysts doubt AMD can break Intel's stranglehold on the business market. "They must be smoking something illegal," says Ashok Kumar, who follows the company for U.S. Bancorp Piper Jaffray. Kumar says business IT buyers are inherently conservative, adding, "Nobody ever got fired for buying IBM, and the same is true for Intel."
iweek.com
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