Thursday April 27 4:58 AM ET
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Chip Firms AMD, Intel Hosting Rival NYC Meetings
By Therese Poletti
SAN FRANCISCO (Reuters) - Computer chip rivals Advanced Micro Devices Inc. (NYSE:AMD - news) and giant Intel Corp. (NasdaqNM:INTC - news) are both hosting investor-oriented meetings in New York on Thursday, with an unusual twist this year in their long-standing David and Goliath battle.
Intel of Santa Clara, Calif., the world's largest maker of computer chips, will be on the defensive when it hosts its twice-annual analyst meeting, as analysts are expected to probe further into the capacity constraints that hampered its less-than-stellar first quarter earnings performance.
Sunnyvale, Calif.-based AMD, on the other hand, will undoubtedly receive a warm reception from its shareholders at its annual meeting Thursday. AMD stockholders, who have suffered through numerous product missteps and have criticized the high compensation paid to chairman W.J. (Jerry) Sanders III, may have nothing but praise for the 63-year-old founder and his team.
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AMD's annual meeting comes on the heels of the company's most profitable quarter in its 31-year history and a four-fold surge in its stock price, which was trading as low as 20 in November. On Wednesday, its shares closed down 4 5/8 to 82 7/8.
``I think everyone has become aware that the situation at AMD has become significantly different than it was a year ago,'' said Tad LaFountain, an analyst with Needham & Co. ``It will probably be a giant love-fest, which I don't think Jerry will mind at all...The stock has gone from less than 20 to over 80.''
AMD plans to use the annual meeting as a launching pad to discuss the first details of its first derivative Athlon product line, the chip family that has helped AMD return to profitability. AMD said it plans to announce that a new line of Athlon processors will be called Duron, aimed at the sub-$1,000 PC market, where it will compete with Intel's Celeron chip.
The Duron family, previously code-named Spitfire, will be launched sometime in the middle of the year, an AMD spokesman said. The Athlon chip line, which currently has products that run at record-breaking clock speeds of one gigahertz, will continue to be aimed at the performance market, with higher clock speeds.
The company will continue to develop its K6 line of processors, but they will be targeted at the lower end of the low-cost PC sector.
Other new members of the Athlon family, currently code-named Thunderbird and Mustang, will be launched later this year. AMD may give more updates on these products at its annual meeting.
At its financial analyst meeting, Intel plans to provide updates on its much-anticipated new products, such as its Willamette chip, its next generation 32-bit processor that will eventually succeed the Pentium III, Itanium, its 64-bit processor targeted to the high-end server and workstation market, and Timna, a new version of its low-cost Celeron processor, which will combine many computing functions onto one chip.
One analyst said Intel may discuss a new digital signal processor as a result of its joint venture with Analog Devices Inc. (NYSE:ADI - news), which was first announced in February, 1999.
``It wouldn't surprise me to see something there,'' said Joe Osha, a Merrill Lynch analyst. An Intel spokesman said the company is planning a traditional update on its business.
Some analysts said they are also hoping to get a better sense from Intel's management on its capacity constraints. In its first quarter earnings last week, Intel was not able to meet all the demand for its chips, saying if it had more parts it would have shipped them.
``I'm very cautious on Intel,'' said LaFountain. ``I'm having a difficult time understanding why they are unable to keep up with demand...I want to understand what steps they are taking that they don't repeat this failure to invest in the core business.''
Last week, Intel also reiterated its plans to boost capital spending to $6 billion for the year, up from its prior intent to spend $5 billion, as it expands its manufacturing capacity.
Intel executives are also expected to highlight several new areas of focus, as it seeks to grow beyond its core microprocessor business, such as networking, communications products, wireless and its Intel Capital business.
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