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AMD nips at Intel’s heels
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January 6, 2000: 4:11 p.m. ET
800 MHz Athlon chip is latest move in ongoing processor-speed race
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - Advanced Micro Devices closed the gap in its ongoing microprocessor-speed race with Intel Thursday, rolling out an 800 MHz Athlon processor.
AMD (AMD), which has been running neck-and-neck with Intel (INTC) over the past several quarters, also demonstrated a personal computer that, combined with technology provided by KryoTech, allows an Athlon processor to operate at 1 GHz, or one billion Hertz per second.
Several computer makers, including Compaq, IBM and CyberMax, said they plan to introduce systems using the 800 MHz Athlon. However, the 1 GHz system, which uses a special cooling system to enable the processor to reach the higher speed, is not likely to be commercially available to consumers for some time, according to analysts.
In late December, Intel launched its 800-MHz Pentium III, or "Coppermine” processor, trumping AMD, which a month earlier inched ahead of Intel by rolling out its 750-MHz Athlon.
While the processor-speed developments are important for AMD because they show that the company has the ability to keep in step with its larger rival, they have very little impact on the company’s profit picture, noted Joe Osha, semiconductor analyst at Merrill Lynch.
"It has more press significance than it does commercial significance,” Osha said.
Even though AMD and Intel have engaged in a fierce battle of one-upmanship as they vie for the title of microprocessor king, neither of them makes very much money at the high-end of the market, Osha said.
While much is made of the incremental increases in processor speed, the faster parts often are scarce, and the components required to support the systems that run at the higher speeds also have posed problems, according to Osha.
"Most PC [manufacturers] at this point, especially in the desktop space, aren’t going to do very well trying to sell people a 750 MHz machine, especially given the some of the difficulties they’ve been having getting Rambus and the chipsets needed to support it,” he said.
Shares of AMD ticked up 13/16 to 3-13/16 in New York Stock Exchange trade late in Thursday’s session. Meanwhile, Intel slipped 3-25/32 to 79-27/32.
But Osha attributed those moves more to news from Gateway (GTW), the world’s largest seller of build-to-order personal computers.
After the closing bell Wednesday, Gateway said it would likely fall short of fourth-quarter sales and profit forecasts, due in part to a shortage of parts from Intel, its sole supplier of microprocessors. Many industry observers now expect Gateway to start buying processors from AMD as well.
"They felt that they had committed to a sole-source relationship and didn’t get what they needed,” Osha said. "That is what’s taking Intel up and AMD down. The clock-speed war is mostly PR.” 
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