Dow Jones Newswire
Advanced Micro Expects Another Top PC Customer Soon
December 19, 1997
Advanced Micro Expects Another Top PC Customer Soon
By CHRISTOPHER GRIMES
Dow Jones Newswires
NEW YORK -- Advanced Micro Devices Inc. (AMD) won't say if Compaq Computer Corp. (CPQ) will become the next customer of its K6 microprocessor, but officials said they expect another top computer company to adopt its Pentium II-rival chip soon.
Spokesman David Frink wouldn't comment on persistent rumors that Compaq, the world's top PC manufacturers would begin to use the K6 in some models. But he did say AMD expects "to add another tier-one customer" in the first quarter.
Analysts have said the two companies are close to an agreement on the K6 powering some Compaq PCs. Having the top PC maker as a customer would be a feather in AMD's cap, even thought it's widely thought that Compaq is negotiating a very low price for the chips.
While it has been disappointed by the smaller-than-expected K6 yields from its Fab 25 factory in Austin, AMD has perhaps surprised even itself by the willingness of top computer companies to use the chip. International Business Machines Corp. (IBM) is using the K6 in some models, as are Digital Equipment Corp. (DEC), Acer, Fujitsu and AST.
Company officials also said AMD remains on target to produce about 1.5 million K6 chips by the end of the quarter.
Frink, speaking in a recent interview in Austin, said the company expects to continue production in the last two weeks of December.
AMD has had to modify its goals for K6 production since it began an ambitious challenge to rival Intel Corp. (INTC) in April. At the end of the third quarter. the company had projected fourth quarter production of 2 million of the chips but then had to set sights lower to between 1.5 million and 2 million.
AMD officials said that anecdotal evidence showed strong retail sales of K6 powered PCs in the fourth quarter. For instance, Wal Mart Stores Inc. (WMT) sold 40,000 K6-based PCs on the Friday after Thanksgiving, said Dirk Heinen, the division marketing manager of AMD's PC products division.
"We've been surprised how well AMD is doing in the retail space, especially in the U.S. market," Heinen said, noting that AMD doesn't have the marketing dollars that Intel has for retail advertising.
-By Christopher Grimes; 201-938-5253
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