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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RDM who wrote (61232)	6/10/1999 1:50:00 AM
From: Paul Engel	Respond to of 1573923

RDM - Hope Springs Eternal supersite.net Can the K7 pull it out for AMD? High-performance MPU is critical for the company and its CEO By Jack Robertson SUNNYVALE, Calif. -- Once again, Advanced Micro Devices Inc. is about to step up to the plate in its never-ending battle with Intel Corp. for the global microprocessor market. And this time around, it will be the big leagues for the on-again, off-again chip maker. Instead of coming out with another low-end, x86 microprocessor -- a market where AMD has made the most headway against Intel, but one where profit margins are razor-thin -- its latest MPU will be the long-awaited K7. The company is counting on this high-end powerhouse to generate much larger margins. Even before it is launched, the K7 is being viewed as a potential winner by analysts and customers alike. Although manufacturing problems combined with Intel's aggressive pricing have blunted AMD's recent MPU assaults. But things are going better now for the company. In May, AMD was able to follow Intel's lead in cutting the prices of its MPUs across-the-board, thanks largely to "vastly improved" manufacturing yields. The current picture seems to be a major improvement over February when AMD lost a pile of money after production problems had sliced its yields of good chips. At the same time it had to cut prices to keep up with Intel. AMD is counting on the K7 to generate the kind of revenues that the company has been targeting for years. Success is absolutely critical to the future of the company and even of the CEO, W.J. "Jerry" Sanders III, who has come under attack from some shareholders for the company's profit problems. AMD hasn't said all that much about its most advanced microprocessor yet, but the company is expected to make its target June launch date. AMD will claim that the K7 will be the industry's first true seventh-generation microprocessor architecture, a design that breaks away from the long-established x86 core. The big question now is: Will the K7 cut into Intel's high-end PC markets? It certainly has the potential. Industry sources say the K7 is running at 600 MHz at the firm's test facilities. While the company won't confirm this speed, Sanders acknowledges that the new MPU will run at 450-to-550 MHz. The new processor is described as having three floating-point units, each of which can accept an instruction every CPU cycle. This pipelined approach will allow several instructions to be processed simultaneously on each clock cycle. The K7 will have a large 128-Kbyte L1 cache and an L2 cache ranging in size from 512-Kbytes to 8-MBytes for servers. This touted K7 power makes it one of the first AMD contenders for the high-end PC, workstation, and server markets that Intel increasingly has dominated. While the company is expected to price the K7 at its usual 20-to-25% discount below that of comparable Intel processors, AMD for the first time will be competing in the higher-end market with "Intel-like" profit margins. If AMD can pull this off, the K7 should be able to help it avoid the perennial financial crunch that has haunted the company, says Tad LaFountain, semiconductor analyst for Needham & Co. in New York. "The issue isn't K7 technology, which looks fantastic," adds Tony Massimini, microprocessor analyst for Semico Research Inc. in Phoenix. "The overriding question hanging over the K7 is whether AMD can finally produce a leading edge processor in [sufficient] volume to meet market demand. They have disappointed the market so many times in the past with manufacturing snags that everyone is waiting to see if AMD can finally deliver." For the first time, AMD will be targeting the PC server market with its new powerhouse, but the K7's entry will be only a basic, two-processor version. Larger four-to-eight processor servers may have to wait for a new chip set due to arrive later this year from Poseidon Technology Inc. of San Jose. AMD already has shipped several thousand evaluation K7s, Prudential Securities estimates, and will ramp production to about 400,000 chips in the third quarter and 1 million in the fourth quarter. The first K7s are being made at AMD's Austin, Tex., fab, using proven 0.25-micron processing. Later, it will migrate the K7 production to its 0.18-micron lines for higher yields. Volume production will come early next year when the company's Dresden, Germany fab comes on line. "Many OEMs will probably gamble [that] AMD won't stumble this time and will buy the K7 just because they are so anxious to get an alternative processor supplier to Intel," Massimini figures. "A lot of people are rooting for AMD and the K7." One of those boosters is Compaq Computer Corp., which has a lot rriding on the K7. AMD picked the former Digital Equipment Corp.'s EV-6 Alpha microprocessor bus for its K7 front-side bus, which connects the core-logic chip set to the processor. Compaq, which purchased Digital, is trying to boost its Alpha-based server line -- a strategy that could be enhanced if a large base of K7 PCs using the same front-side bus becomes established. When the K7 kicks off in June, its 200-MHz EV-6 bus will run twice as fast as Intel's 100-MHz processor bus. The K7 bus will even be a lot faster than Intel's delayed 133-MHz front-side bus, which is now slated for release by the end of September. A bevy of independent chip-set makers and DRAM suppliers are ready now to jump on the K7 bandwagon, and they expect to offer faster memory speeds than anything in Intel's current line. Two Taiwan-based chip-set makers -- VIA Technology Inc. and Acer Laboratories Inc. -- will offer 133-MHz processors and PC133 SDRAM sets to connect with the K7 EV-6 bus. And most major DRAM producers are ready to flood the market with PC133 chips once the 133-MHz chip sets start arriving.