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To: Joseph Pareti who wrote (60863)	7/20/1998 8:57:00 AM
From: Steve Parrino	Read Replies (1) \| Respond to of 186894

AMD, Motorola in technology exchange alliance Monday July 20 6:49 AM EDT SAN FRANCISCO (Reuters) - Advanced Micro Devices Inc. and Motorola Inc. are expected to unveil a strategic technology-sharing alliance Monday, with AMD expected to use Motorola's copper process technology to make faster chips, industry sources said. The companies said in a news advisory that they will be announcing a strategic alliance Monday that will affect the embedded and desktop microprocessor markets. A spokesman for AMD, based in Sunnyvale, Calif., said he could not make any comment beyond the news advisory. Motorola officials in Schaumburg, Ill. could not be reached for comment. But industry sources said AMD and Motorola are engaged in a technology exchange pact that will include Motorola sharing its copper process so AMD can develop faster microprocessors, using copper in the manufacturing process. Motorola, in return, will gain access to AMD's flash memory products, to incorporate flash memory in its embedded processors, for faster embedded chips. Embedded processors are designed for specific functions, such as printing, and it is one area where Motorola's PowerPC chip has made big inroads. Copper technology has been widely touted by many in the semiconductor industry as a future way to design faster chips. International Business Machines Corp. created a stir in the industry when it announced it created faster, lower-cost semiconductors using copper instead of aluminum as an electrical conducting property. Since then, other companies, including Motorola, have also announced copper technology processes. Advanced Micro Devices needs to find ways to make its microprocessors even more competitive with Intel Corp., which is spending about $4.5 billion on capital expenditures this year, which includes its manufacturing facilities. Analysts speculated Motorola will use AMD's flash memory and other AMD technologies such as embedded networking to build system-on-a-chip processors, with more functions on one chip, for low-cost, small, hand-held computing devices. "They will integrate it with the system peripheral core, and they can go after the system-on-a-chip market," said Ashok Kumar, a Piper Jaffray analyst. "They can then go after the very low price point market." Earlier this week, IBM announced an agreement with Silicon Storage Technology Inc. of Sunnyvale to license Silicon Storage's SuperFlash memory technology. IBM said it plans to combine logic and memory functions on a single chip. As new chip fabrication plants become more expensive to build, analysts said they expect more collaborative deals between chip makers, especially during the current industry slump.