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New chip boosts AMD
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August 9, 1999: 1:17 p.m. ET
Company poised to take on Intel with release of high-speed Athlon chip
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NEW YORK (CNNfn) - Shares of Advanced Micro Devices Inc. gained nearly 11 percent Monday afternoon after the company unveiled its long-awaited, high-speed Athlon microprocessor -- a PC chip that finally may give the company a competitive edge over market leader Intel Corp.
AMD 's (AMD) 650 MHz version of its Athlon chip is clocked faster than Intel 's (INTC) fastest Pentium III chip, which runs at 600 MHz.
AMD has been hurt in its battle with Intel for the low-cost PC market. The company has been forced to cut prices to keep pace with its rival. Unlike Intel, however, AMD never had a high-end chip to offset the pricing pressures in the low end of the market.
AMD shares rose 1-7/8 to 19-1/4 in afternoon trade. BancBoston Robertson Stephens upgraded its rating on AMD to "buy" from "long-term attractive," citing AMD's current technological advantage over Intel.
"With today's launch of the 650 MHz Athlon, AMD stands alone with Intel at only 600 MHz for the P-III," Niles said. "In addition, at equivalent clock speeds, AMD has a significant performance advantage on about any benchmark you care to look at."
Analysts have previously stated that the Athlon represents the last chance for AMD to survive its battle with Intel. The company's profit margins have shriveled as it has cut prices on its low-end K6 line of processors to match similar moves made by Intel with its Celeron series.
In the second quarter, the average selling price of AMD's K6 processor was $67, compared with $78 in the fourth quarter. W.J. Sanders, AMD chairman and chief executive officer, has explicitly stated that AMD is banking on the Athlon to bring the company back to profitability.
"AMD has been building processors for decades," Sanders said. "But this is the first time that we have made a clear generational leap over Intel -- being able to outperform them as well as being able to achieve higher clock speeds. We are very excited about what this can do for our company." 
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