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http://money.cnn.com/news/newsfeeds/articles/djf500/200703291555DOWJONESDJONLINE001007_FORTUNE5.htm
SAN FRANCISCO (Dow Jones) - A major computer-chip redesign at Intel
Corp. will likely put more pressure on smaller rival Advanced Micro
Devices Inc., industry observers said Thursday.
Intel (INTC) is working on a new computer chip called Nehalem that
will integrate the microprocessor -- the central processing unit in a
PC - with the chip's memory controller.
Intel currently uses external memory in separate products known as
chipsets that fetch data from different parts of the computer. The
Nehalem chip should help Intel relieve performance bottlenecks in its
current family of chips, analysts said.
AMD chips have had the two features combined for several years now, a
technology edge that has helped the company take market share from its
larger rival.
"Nehalem appears to be a truly revolutionary platform and addresses
AMD's latest claim of differentiation," wrote Deutsche Bank analyst
Ross Seymore.
In midday trading Thursday, AMD shares fell 2.5% to $13.05. Intel lost
0.4% to $18.48.
Intel plans to ship the Nehalem chip in 2008. It said customers will
be able to choose from single-core to eight-core versions, which are
the equivalent of eight electronic brains on a single chip.
Intel also said it plans to add some graphics capability onto the
chip. AMD is currently working on a similar design associated with its
$5.4 billion acquisition of ATI Technologies last fall.
AMD is facing increased pressure from Intel, which wants to win back
market share it's lost the past three years. To carry out that plan,
Intel intends to release several new chip lines through 2010.
Since last summer, Intel has unleashed 40 new microprocessors for
desktops, laptops, and servers.
In 2003, AMD (AMD) began to combine the memory controller with the
central processor when the company launched its Opteron server chip.
The processor, which uses so-called direct connect architecture,
rejuvenated AMD's fortunes, helping it dent Intel's worldwide market
share and forcing Intel to admit it made some technological missteps.
AMD now commands 25% of the world's microprocessor market, up
significantly from what it had before it rolled out the Opteron line.
Its encore to Opteron is called Barcelona, which is slated to hit the
market by mid-summer. Barcelona is the chipmaker's first major design
refresh in more than three years.
Intel's plans are "further validation that their current architecture
will not be competitive with Barcelona until they make this transition
that we showed the industry in 2003," AMD Vice President Randy Allen
said in a prepared statement.
Barcelona will compete with a quad-core processor Intel launched this
past November. AMD said its product won't force customers to make
"wholesale infrastructure changes in order to achieve incremental
performance gains."
Last month, AMD warned it won't meet its previous first-quarter
financial targets as it struggles with weaker prices for its
microprocessors and supply problems.
"It is becoming obvious that AMD's only weapon, outside of Barcelona,
is price," wrote Doug Freedman, analyst at American Technology
Research.
He projects Intel will recapture market share in the server space -
where AMD has hurt Intel the most - and concede less profitable parts
of the PC market to AMD.
SAN FRANCISCO (Dow Jones) - A major computer-chip redesign at Intel
Corp. will likely put more pressure on smaller rival Advanced Micro
Devices Inc., industry observers said Thursday.
Intel (INTC) is working on a new computer chip called Nehalem that
will integrate the microprocessor -- the central processing unit in a
PC - with the chip's memory controller.
Intel currently uses external memory in separate products known as
chipsets that fetch data from different parts of the computer. The
Nehalem chip should help Intel relieve performance bottlenecks in its
current family of chips, analysts said.
AMD chips have had the two features combined for several years now, a
technology edge that has helped the company take market share from its
larger rival.
"Nehalem appears to be a truly revolutionary platform and addresses
AMD's latest claim of differentiation," wrote Deutsche Bank analyst
Ross Seymore.
In midday trading Thursday, AMD shares fell 2.5% to $13.05. Intel lost
0.4% to $18.48.
Intel plans to ship the Nehalem chip in 2008. It said customers will
be able to choose from single-core to eight-core versions, which are
the equivalent of eight electronic brains on a single chip.
Intel also said it plans to add some graphics capability onto the
chip. AMD is currently working on a similar design associated with its
$5.4 billion acquisition of ATI Technologies last fall.
AMD is facing increased pressure from Intel, which wants to win back
market share it's lost the past three years. To carry out that plan,
Intel intends to release several new chip lines through 2010.
Since last summer, Intel has unleashed 40 new microprocessors for
desktops, laptops, and servers.
In 2003, AMD (AMD) began to combine the memory controller with the
central processor when the company launched its Opteron server chip.
The processor, which uses so-called direct connect architecture,
rejuvenated AMD's fortunes, helping it dent Intel's worldwide market
share and forcing Intel to admit it made some technological missteps.
AMD now commands 25% of the world's microprocessor market, up
significantly from what it had before it rolled out the Opteron line.
Its encore to Opteron is called Barcelona, which is slated to hit the
market by mid-summer. Barcelona is the chipmaker's first major design
refresh in more than three years.
Intel's plans are "further validation that their current architecture
will not be competitive with Barcelona until they make this transition
that we showed the industry in 2003," AMD Vice President Randy Allen
said in a prepared statement.
Barcelona will compete with a quad-core processor Intel launched this
past November. AMD said its product won't force customers to make
"wholesale infrastructure changes in order to achieve incremental
performance gains."
Last month, AMD warned it won't meet its previous first-quarter
financial targets as it struggles with weaker prices for its
microprocessors and supply problems.
"It is becoming obvious that AMD's only weapon, outside of Barcelona,
is price," wrote Doug Freedman, analyst at American Technology
Research.
He projects Intel will recapture market share in the server space -
where AMD has hurt Intel the most - and concede less profitable parts
of the PC market to AMD.