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AMD leads Intel in chip race
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March 6, 2000: 2:00 p.m. ET
New high-speed chip breaks gigahertz milestone; AMD shares soar 14%
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NEW YORK (CNNfn) - Advanced Micro Devices has once again taken the lead in the ongoing microprocessor-speed race with its larger rival, Intel.
The company on Monday said it began shipping an Athlon processor, which operates at 1 gigahertz, or 1 billion cycles per second, making it the fastest commercially available processor currently on the market.
"Attaining the 1 gigahertz performance mark has long been a paramount goal for producers of PC processor," said W.J. Sanders III, AMD's chairman and chief executive.
Over the past year, AMD (AMD: Research, Estimates) has been in competition with its larger rival in what has become a fierce battle for bragging rights. However, with most of its prior incremental increases in microprocessor speed, analysts pointed out that AMD's faster chips had not been widely available.
This time, AMD said that it is shipping the chips in volume to Compaq (CPQ: Research, Estimates) and Gateway (GTW: Research, Estimates), which are expected to begin shipping 1 gigahertz systems by the end of this month.
"At a psychologically important speed level, they've beaten Intel to the punch," said A.A. Lafountain, a semiconductor analyst at Needham & Co.
"Secondly, they've not only gotten out there with a working product, the fact that they've been able to simultaneously announce volume shipments from some leading PC vendors means that this is a far different situation from a year ago when they either couldn't ship the parts, or when they had parts they couldn't get high-profile (PC makers) to go out the gate with them," Lafountain added.
Reaching the gigahertz milestone first also lends credibility to AMD, which investors until recently may have seen as on a different playing field, according to Jack Geraghty of Gerard Klauer Mattison.
"In the past, AMD was like the 'second cousin' to Intel, with the lower quality chip," Geraghty said in an interview on CNNfn Monday. "Now they've got something ahead of Intel, same level, same pricing and can say now that they are on an equal plane with them."
Investors applauded the news as well, sending AMD shares up 5-3/4, or nearly 14 percent, in extremely heavy New York Stock Exchange trade.
Intel, which demonstrated a working version of a 1 gigahertz Pentium III chip last month and has already begun shipping them to Dell (DELL: Research, Estimates), Hewlett-Packard (HWP: Research, Estimates) and IBM (IBM: Research, Estimates), expects to officially announce their availability shortly, an Intel spokesman said Monday. 
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