August 26, 2003 4:00 AM PDT

AMD revives Duron line

Advanced Micro Devices has brought its Duron chip back from the dead and will probably extend the life of its Athlon XP chip, in an attempt to take back market share in the budget-PC market.

The Sunnyvale, Calif.-based chipmaker confirmed Monday that it has begun selling three new Duron chips--running at 1.4GHz, 1.6GHz and 1.8GHz--in China, Latin America and other developing markets. An AMD representative, however, emphasized that the new chips are available only in developing markets in limited quantities.

In April of last year, AMD CEO Hector Ruiz said the Duron would be phased out by the end of 2002. The company had not come out with a new Duron since January 2002.

In addition, AMD said it will likely move its Athlon XP, which has been on the market since 2001, to the 90-nanometer manufacturing process and continue to make the chip through 2004. Earlier, company executives said there were no plans to come out with new Athlon XPs or bring the chip to the more advanced 90-nanometer process.

The changes come as a way to plug gaps in the company's product line and shore up its financial situation, according to analysts.

The Duron is coming out of retirement partly to revive slowing sales in China, which had contributed to the company's lower-than-anticipated sales in the second quarter.

The new Athlon XPs, meanwhile, are coming to market to compensate for delays to the upcoming Athlon64 lineup. The first Athlon64 chips are set to hit the street in September, but won't start coming out in massive volume until the debut of 90-nanometer manufacturing, Marty Seyer, vice president and general manager of AMD's Microprocessor Business Unit, said in an interview earlier this month.

The 90-nanometer process enables chipmakers to produce chips with an average feature size of 90 nanometers. (A nanometer is a billionth of a meter.) Current chips are made on the 130-nanometer process.

Until the 90-nanometer manufacturing begins, Seyer said, the Athlon64 will be identical in size to the Opteron chip at 193 square millimeters. The Athlon XP, by contrast, measures 101 square millimeters, which makes it far cheaper to make.

"That is a hugely bigger die. Extending the Athlon XP is a reasonable goal," said Kevin Krewell, senior editor at the Microprocessor Report.

These factors mean there will be a limited number of relatively pricey Athlon64 chips on the market at first. Thus, extending the Athlon XP line will let AMD continue to make chips for the midtier and budget PC market.

"They've got a factory that is capable of producing far more units than they are delivering right now," said Dean McCarron, principal analyst at Mercury Research.

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Although the new Durons share the same name as their predecessors, they differ in certain respects. The older Durons were made in AMD's Austin, Texas, manufacturing facility on the 180-nanometer process. In 2002, though, AMD converted the facility to manufacture only flash memory. As a result, the new Durons are being made in the company's Dresden, Germany, facility on the 130-nanometer process.

The bus on the new chips, however, runs at 266MHz, faster than the 200MHz bus on the older models.

Supercheap chips could well help the company cement a foothold in lower-end markets and establish more of a brand name, said McCarron. "This is the market (that Taiwan's Via Technologies) has been concentrating on for years," he said.

Although AMD has only recently announced the new Duron chips, McCarron said there was an increase in Duron sales in the second quarter. At the time, it was unclear whether the increase was due to new manufacturing activities or a flush of excess inventory.

Surplus supplies of chips can linger for quite a long time. Sam's Club, a division of Wal-Mart, began selling a Linux computer with a 1.1GHz Duron in March, months after Duron manufacturing ceased.

Nathan Brookwood, an analyst at Insight 64, said the Duron was canceled in part because it interfered with AMD's "performance initiative," which rated chips by performance numbers rather than megahertz. Duron has a relatively high megahertz, but doesn't rate as well on the performance scale as the Athlon XP.

 

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