February 11, 2000 4:55 PM PST

AMD snags speed crown from Intel

Advanced Micro Devices passed rival Intel today in the microprocessor speed race when it announced an 850-MHz version of its flagship chip.

Sunnyvale, Calif.-based AMD unveiled an 850-MHz Athlon, the company said. The move will give AMD the right to claim it has the fastest desktop chip in the market. Intel's Pentium III tops out at 800 MHz, although versions running at 850 and 866 MHz are expected in the near future.

The two companies have been jousting for the bragging rights since AMD released the Athlon last summer. Traditionally a maker of budget processors, AMD has vaulted into the mainstream desktop market with Athlon.

The two chips are roughly equal in terms of performance when running at the same speed, according to benchmark tests. The measurements and results vary, however, and have been the subject of lively debates in the processor world.

AMD and Intel's greatest problems have been in supply. By accelerating their product road maps, both companies have created shortages at the high end of their processor lines. In short, both companies are announcing processors before normal inventories even exist. Supplies of the fastest chips, however, are improving and will continue to grow as the average speed of chips being produced goes up.

"(Supply) is limited, but it has improved to where it was a month ago," said Dean McCarron, principal analyst at Mercury Research.

On a positive note for AMD, McCarron also said that experience is paying off for the company. The overall performance and reliability of Athlon computers has improved since last year, due in all likelihood to tweaks and adjustments to the collection of technology that stands behind these machines.

"The stability of the AMD platform is light years ahead of where it was six months ago," he said.

Manufacturers IBM, Gateway, Compaq and Hewlett-Packard incorporate Athlon in their PCs. Athlon typically goes into high-end consumer and small-business systems. Servers and workstations are expected to begin including the chip later this year.

Earlier this week, AMD demonstrated a version of Athlon running at 1.1 GHz at the International Solid State Circuits Conference. The speedy chip uses copper wires, rather than aluminum, to connect circuits. AMD is expected to start releasing copper chips commercially in the second half of this year, while Intel will not move to copper until the second half of next year.

The 850-MHz Athlon sells for $849 in volume, although retail prices will vary. Other Athlon prices were not cut, an AMD representative said.

By the 1 p.m. PST close of regular trading today, the company's stock had gone up $2.50 to $44. Besides the chip release, the company also stated that sales would likely be equal to or higher than fourth-quarter sales of $969 million. AMD made a profit of $65 million in the fourth quarter, its first quarterly profit in a year.

 

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