AMD to roll out K6-III chip
By Michael Kanellos
Staff Writer, CNET NEWS.COM
February 19, 1999, 5:00 p.m. PT
Advanced Micro Devices will released the K6-III Monday, a new chip that the company
says rivals the Pentium III, although observers say the chip may not be the cure for all of
AMD's current woes.
The K6-III, which runs at 400 Mhz and will hit 450 MHz next month, is AMD's attempt to enter into the
performance and business computer segments, according to Dana Krelle, vice president of marketing at AMD.
AMD chips currently mostly come in computers in sub-$1,000 consumer PCs.
While the K6-III will start in the consumer segment, improved performance benchmarks, especially on the
Windows NT operating system, will make the chip an attractive, less expensive, option to Intel processors for
these markets, he added. The 400-MHz version will sell for $284 in volume while the 450-MHz version will sell
for $476, lower than Pentium IIs and IIIs at similar speed grades.
"The K6-III 450-MHz will be the fastest chip on the market. It will be faster than a Pentium III 500-MHz," he
said.
Compaq will become the first company to use the chip, he added, but others will follow. Last week, Gateway
signed a deal to introduce AMD-based PCs to the U.S. market in 1999.
Analysts, however, remain skeptical of the effect the K6-III will have on the market. The chip will likely only be
able to go up to 500 MHz, giving it a relatively short life span before being replaced by the K-7, coming in the
second half of the year. AMD has also recently had more difficulties in manufacturing enough high performance
processors.
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"They have a hard time attracting new customers because they can't hit their manufacturing goals," said John
Joseph, semiconductor analyst at NationsBanc Montgomery Securities. "AMD's problem is AMD."
The boost in performance for the K6-III comes from the introduction of a 256KB secondary, integrated cache,
Krelle said. Cache memory acts as a data reservoir for the processor core and in general improves performance.
The upcoming Pentium III, and most Pentium II chips, contain 512KB of secondary cache that sits alongside the
processor.
On the K6-III, however, the cache is integrated into the same piece of silicon as the processor, which speeds up
communication with the processor. Although the integrated cache is smaller, it ends up delivering a higher level of
performance, according to Krelle and others. In addition, up to 2MB of third level cache can be added to the
K6-III as well.
Intel Celeron chips contain a 128KB integrated secondary cache, but the Pentium III
line won't become "integrated" until the third quarter, according to most sources. As a
result, AMD enjoys a delta in performance with the chip. The K6-III also comes with
the 3DNow multimedia enhancements which are similar to the enhancements coming
with the Pentium III, which gets officially goes on sale on February 26.
AMD, in fact, is claiming that a 400-MHz K6-III with the 2MB of third level cache
will outperform a 500-MHz Pentium III.
Analysts, however, say that performance gains will not be easy. The current designs
of the K6-2 and K6-III will be difficult to boost past 500 MHz, said Dean
McCarron. In addition, "Intel is going to be very aggressive on pricing," with the
Pentium III, said Joseph. The end result: the K6-III will only have a limited life span
and will start to rapidly lose market value.
Krelle, however, disputes this. The K6-2 and K6-III will continue to be produced by AMD through 2000 and
continue to come out at faster speeds. As Intel has done with the Celeron chips, AMD will use these older
processors for computers in the less expensive product segments and attempt to reach more lucrative markets
with the K7 and its successors.
"We are going to have different classes of products. We will have product lines to address different markets," he
said, adding "We will have the lowest cost solution for the clock rate."
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