AMD debuts new chips, eyes corporate market

Chipmaker Advanced Micro Devices today debuted a high-performance version of its Athlon processor.

Gartner analyst Kevin Knox says at a time when Intel is struggling with supply problems, AMD has a prime opportunity to break into the lucrative commercial PC market. see commentary

As expected, AMD today introduced Thunderbird, the code name for the newest Athlon chip. The new chip is essentially an enhanced version of the Athlon, a line of processors that has been credited with turning the company's fortunes around. Its release is expected to spark a new round of competitive battles with Intel.

AMD also today released its Duron processor to PC manufacturers. Duron, a low-cost version of the Athlon, runs at 600 MHz, 650 MHz and 700 MHz, and will be formally launched later this month.

Designed for high-end consumer systems and business desktops, Thunderbird will run at six speeds ranging from 750 MHz to 1 GHz, AMD said. The chips will be used in systems from Compaq, Hewlett-Packard and IBM.

In quantities of one thousand, the new Athlon chips range in price from $319 for the 750-MHz version to $990 for the 1-GHz version. Duron starts at $112 for the 600-MHz chip.

Although similar to current Athlons in several respects, the new chips incorporate a number of firsts for the chip manufacturer.

The new Athlons, for instance, will contain 256KB of secondary cache integrated into the processor. The cache improves performance because it holds data the processor needs to access quickly. Previous Athlons come with 512 KB of secondary cache located near the processor but on separate chips. Although larger, the cache on current Athlons is slower.

The new architecture also cuts manufacturing costs. Free of the larger cache, Thunderbirds can be put into smaller, less expensive packages.

The new processor also marks AMD's first foray into copper. Many of the new Thunderbirds will be made with copper, rather than aluminum, circuitry. Because copper conducts electricity better than aluminum, the chips run cooler. This gives AMD the opportunity to make faster versions in the future.

AMD also formally opened its fabrication facility in Dresden, Germany, today. Copper Thunderbirds will come out of AMD's Dresden plant; aluminum Thunderbirds will be produced at its Austin, Texas, facility.

David Somo VP of Marketing, AMD   Describing the improved cache performance.

In addition, AMD will begin to market Thunderbirds for the business and corporate market. Computers using AMD's chips have mostly been confined to the consumer market. The consumer PC market continues to grow, but it represents less than 40 percent of the overall market. A push into the commercial sector therefore would open new revenue streams for AMD.

The opening of the Dresden facility couldn't come at a better time for AMD, noted Nathan Brookwood, an analyst at Insight 64. The industry is currently in the midst of a severe processor shortage. A scarcity of Intel processors in the first quarter, for instance, prompted Gateway to adopt Athlon for some of its computers.

Although Intel's plight has been more visible, AMD has been selling out a number of its processors.

With Dresden, AMD will double its manufacturing capacity, giving the company an opportunity to nab market share. "Everybody has been struggling about the shortage of microprocessors," Brookwood said.