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

To: StockMan who wrote (28981)	2/26/1998 7:42:00 PM
From: Maverick	Respond to of 1574053

Investors Heartened By Reports Of Chip Talks Between AMD, IBM Dow Jones Online News, Thursday, February 26, 1998 at 17:22 NEW YORK -(Dow Jones)- Shares of chip maker Advanced Micro Devices Inc. advanced Thursday on reports the company is in talks with International Business Machines Corp. regarding a closer relationship. At the close, shares of Sunnyvale, Calif.-based AMD (AMD) were up $3.375, or 16%, at $25.125 in heavy trading. Shares of AMD have been held back in recent months by concerns over the company's ability to boost production of its its K6 microprocessors - the chips AMD hopes will blunt the hegemony of Intel Corp.'s Pentium II chip. AMD sells the K6 for about 25% less than Intel's rival chips. AMD and IBM are reportedly in talks about chip production. IBM already uses the K6 in some computers models, as does Compaq Computer Corp., Digital Equipment Corp., Taiwanese firm Acer and Japanese company Fujitsu. AMD already uses the IBM's semiconductor unit for chip packaging services and Big Blue is believed to have the right to place its own brand name on AMD chips, and possibly even sell them to other companies under some circumstances. "There's a rumor that AMD is in negotiations with IBM for IBM to serve as a foundry for producing the K6," said William Milton, an analyst at Brown Brothers Harriman & Co. "AMD would be producing some share as well," he said, adding that it would be a "co-production kind of deal." He stressed that this is still an unconfirmed rumor, but said that it sounded plausible. The K6 is seen as a credible rival to Intel's Pentium II chip and has generated a lot of interest, but AMD has reduced its production forecast a few times. Analysts who have been bullish on AMD have said all along that the key to denting Intel's 80%-plus market share would be swiftly boosting K6 production. But AMD's execution hasn't been good. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.