AMD ships K7 looking for reversal of fortune

In one realm at least, struggling PC chip maker Advanced Micro Devices Inc. has proven it can outdo rival Intel Corp. When Intel released its low-end processor, the Celeron, the industry poked fun. Now, that AMD has renamed its K7, the struggling company had better have a thick skin.

The name of the next-generation chip: The Athlon.

Sounding more like an Olympic event than a techno workhorse, the Athlon is AMD's potential saviour.

On Wednesday, the Sunnyvale, California, company announced that it expected losses of $200m (£122m) for the quarter ending June 27, 1999. The loss is due mostly to a sharp decline in average selling prices for its AMD-K6 processor family and lower unit shipments, stated the company.

AMD has, however, seemingly recovered from its manufacturing problems. Unfortunately, now that it has its manufacturing under control, demand has fallen, said AMD chief W. J. Sanders III. AMD expects to produce more than 6 million K6 chips, half of which should clock at high-end speeds of 400MHz to 500MHz, but the company does not expect to sell more than 3.7 million chips this quarter.

But the Athlon chip may put AMD back in the black. Priced at $699 for a 600MHz chip, $479 for a 550MHz, and $324 for the 500MHz, it could finally bring AMD's average selling price above the $100 breakeven point that Sanders set as his goal over a year ago.