It appears that the good times have finally arrived at Advanced Micro Devices
as demand for its high-end Athlon microprocessors and flash memory chips has
pushed quarterly sales over the $1 billion barrier for the first time. AMD’s
shareholders are now enjoying the company’s recovery as well, as AMD shares
topped $67 a share this week.
Sales in AMD’s first quarter rose to just over $1.06 billion, 10 percent
above sales recorded in the fourth quarter of 1999. Earnings results will be
announced in the next several weeks. AMD’s success is partially due to
Intel’s inability to keep up with demand for its high-end chips. AMD has
clearly out-maneuvered Intel by stepping up the pace of launching new, more
powerful processors.
AMD has been leveraging the advantages of its copper-based process
technology, which allows its engineers to more quickly shrink die sizes than
Intel. The latter firm continues to rely on aluminum interconnects. By the time
Intel has figured out how to produce chips matching AMD’s top performance, AMD
appears ready with another more powerful chip. In March AMD beat Intel to the
market with the first milestone 1GHz processor. The company’s top 4 processors
outperform Intel’s high-end Pentium III chips in terms of clock speed,
although Intel’s design provides a slightly higher overall performance
advantage.
The race is stretching Intel’s capabilities, both technologically and
logistically as the company has to produce far more chips than AMD. The speed
with which new top-of-the-line chips are introduced into the fabs has been tough
even for Intel. Times have not always been so kind to AMD which has spent the
last 14 years playing catch-up to Intel’s top processors. AMD lost money in
the first three quarters of 1999 and reported losses in 10 of the past 15
quarters.
"We continued to gain unit share worldwide last quarter in the PC
processor segment," said AMD chairman Jerry Sanders. Industry analysts believe
Intel is preparing to once again take a commanding performance lead later this
year with the launch of the "Willamette" processor that may operate in
the 1.5 GHz range.