AMD Unveils Chip for Low-Cost PCs

Taking direct aim at chief rival Intel Corp. (Nasdaq: INTC), Advanced Micro Devices, Inc. (NYSE: AMD) on Tuesday rolled out its newest computer chip aimed at lower-cost computer systems, the Duron 750 megahertz processor.

The Duron competes with Intel’s Celeron chip in the “value PC” segment, which is defined as the market for personal computer systems that cost consumers under $1,000 (US$).

Speed Racers

Intel and AMD have been in a race for the unofficial “speed title” in their high-performance microprocessors as well. AMD officials are taking advantage of the fact that benchmark tests show the Duron is faster at this point, though Intel said it plans to release a faster and improved version of the Celeron chip in the first part of next year.

“The AMD Duron processor is changing the face of the value PC segment much in the same way as the AMD Athlon processor redefined the performance segment,” said AMD’s David Somo.

Duron Faster Than Celeron

According to independent laboratory tests, the Duron has 192 kB of primary and secondary cache compared to the Celeron’s 160kB. The Duron also has a faster, front-side “bus” — the primary communications corridor that relays information from the processor to other parts of the system — of 200 MHz compared to the Celeron’s 66 MHz.

The Duron is a derivative of AMD’s Athlon chip, which has been competing with Intel for the fastest chip in the high-performance market.

AMD officials said more than 20 manufacturers worldwide, including Fujitsu, are offering systems using the Duron chip. Also, IBM and Compaq have indicated they will begin selling systems that use the Duron chip in the coming weeks.

The Duron was introduced in June to take the place of AMD’s now-defunct K6 suite of microprocessors, which had given the company a large share of the low-cost PC market.

Race Casualties

The high-performance speed race has caused some manufacturing glitches. Intel recently recalled some of its 1.13 gigahertz Pentium III chips, which were shipped July 31st, confirming the chip has a flaw that causes some applications to fail under certain conditions.

Intel officials said only a limited number of chips had been shipped and that they hoped to have the problem fixed and the chips back on the market within two months.

On the same day Intel announced the recall, AMD introduced its 1.1-GHz Athlon chip and said several major computer makers, including Hewlett-Packard, were adopting it.

Record-High Semiconductor Sales

The stakes are high in the competitive and fast-growing semiconductor industry.

Global semiconductor sales reached an all-time high of $17.3 billion in July, 50 percent higher than the $11.5 billion recorded for the same period last year, according to the Semiconductor Industry Association.

Company Info

AMD, founded in 1969 and based in Sunnyvale, California, reported revenues of $2.9 billion in 1999. The company counts Motorola and Fujitsu as partners, and its customers include IBM, Compaq, Hewlett-Packard and Acer.

Intel is the undisputed leader in the field: for the 26 weeks ended July 1st, the company reported revenues rose 18 percent to $16.29 billion.

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