AMD beeIng up production of hot K6 processor
Computer Reseller News, January 26, 1998, Issue: 773
Steven Burke & Kelly Spang
Sunnyvale, Calif. -- Advanced Micro Devices Inc. is stepping up its
push to meet VARs' need for its hot-selling K6 processor.
(VAR = value added reseller)
Chief Executive Jerry Sanders recently told Wall Street analysts that
the company is embarking on a no-holds-barred, "high-risk" strategy
aimed at rapidly improving 0.25 micron yields on the K6.
"We have commenced our program to ramp 0.25 micron K6 wafer product
in Fab 25 at the fastest practical rate," said Sanders. "This is a
high-risk strategy in that we have not yet demonstrated the yield
in Fab 25 for 0.25 micron. . . . The first significant 0.25 micron
shipments in Fab 25 will not occur before March."
AMD hopes this approach will help it meet VARs' needs.
The company also recently announced internally an organizational
realignment in a bid to ensure a successful 0.25 micron ramp with
acceptable yields, said Sanders.
"Meeting our customers' demand for higher-performance K6 processors in
the volume they need is our first priority," said Sanders. "We set
this priority higher than total unit shipments, ASP [average selling
price] or short-term profitability."
After the company posted a loss of $12.3 million for its most recent
quarter, Sanders warned AMD has little experience in Fab 25 with 0.25
micron technology and yield improvements on 0.35 have come slower than
expected.
"It is difficult to predict what, if any, unit volume increases we
will see in the current quarter," he said. "It is even more difficult
to predict when we will achieve the quarterly volumes and the
necessary mix to return us to profitability."
"[AMD's ability to deliver products] lingers in the background, but I
don't worry about it," said Scott Paddock, store manager for PC
Brokers, a Denver-based VAR. "They have a good product."
In 1997, Paddock said availability of the 200MHz and 233MHz K6 was
tight, but it was "not a serious issue." Now Paddock is waiting for a
steady supply of the 266MHz chip. AMD is ramping volumes of the chip and will launch it into the channel next quarter.
Copyright (c) 1998 CMP Media Inc.
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