AMD unveils Athlon server processors

Duncan Martell

SAN FRANCISCO: Advanced Micro Devices Inc. on Tuesday announced two new
Athlon chips and a chipset as Intel Corp.'s main rival in microprocessors seeks
to gain a foothold in the lucrative computer-server market.

With the introduction of the Athlon two years ago - the first time AMD had a
processor that matched Intel's toe-to-toe on performance - the company is now
seeking to gain market share not only in desktop personal computers, but also to
mark gains in its new markets of notebooks, servers and workstations.

The chips announced on Tuesday - the Athlon MP processors running at speeds
of 1 gigahertz and 1.2 gigahertz - coupled with the AMD-760 MP chipset give AMD
an advantage against its larger rival Intel, analysts said, because on certain
performance benchmarks, AMD's new chips best Intel's current offerings and are
less expensive. The two processors, for now, are designed for the entry-level
server market, which contain one or two chips per server and typically cost
$6,000 or less.

AMD's performance lead may be short-lived, however. Intel said on May 21 that
its new Xeon chips, using the Pentium 4 core, running at 1.7 gigahertz will be
available by the end of the second quarter, though they will still be more
expensive - by about $130 - than AMD's Athlon offerings.

"If they continue to execute as well as they have over the past two
years, their reputation will extend and allow them to sell into these new
segments," said analyst Nathan Brookwood of market researcher Insight64,
Saratoga, Calif. "But that takes a while."

Sunnyvale, Calif.-based AMD said that, in quantities of 1,000, its 1.2
gigahertz Athlon MP processors will sell for $265 while its 1 gigahertz Athlon
MP chip will sell for $215.

The Athlon MP chip also boasts some 52 new instructions that help boost
floating-point performance, which is one measure of gauging a processor's
ability to crunch data. Better floating-point performance means a faster
delivery of multimedia files and also decreases the time required for a
workstation or system to render complex designs of rockets, aerodynamic
performance and other number-intensive applications, for example.

"This is the first and fundamental step into the server market,"
said Bob Mitton, a marketing manager in AMD's server and workstation group, in
an interview. "This is where the full-court press starts."

While AMD said that more than 20 different computer makers will be selling
workstations and servers based on the chip starting immediately, the biggest PC
makers - such as International Business Machines Corp. , Compaq Computer Corp. ,
Hewlett-Packard Co. , and Gateway Inc. - were absent from the list.

"There wasn't a household name on that list, which is really
disappointing," Brookwood said. "But then, when they announced the
Athlon two years ago, they didn't have any household names on that list,
either." Now, H-P, Gateway and others sell PCs using the Athlon chip. Dell
Computer Corp., the world's biggest PC maker, remains the lone holdout.

Eventually, though, Brookwood said he expects major PC makers, such as IBM,
Compaq and H-P, to start buying AMD chips for use in their entry-level servers.
"This is a stage AMD needs to go through to build some credibility" in
a market where they haven't yet participated Brookwood said.

(C) Reuters Limited 2001.