AMD gaining ground with Athlon

First it won over Gateway's Select PC. Now the chip maker's new deal with Pionex Elite gives it a beachhead in the corporate market

Advanced Micro Devices continues to gain ground in its battle to win acceptance for its Athlon chip among big-name PC makers.

As reported earlier in ZDNet News, Gateway announced Monday that it will offer AMD's Athlon processor in a new line of computers, the Select PC. AMD also announced Monday that its Athlon chip has gained a tiny foothold in the long, hard climb into the corporate market, with PC vendor Pionex Elite offering the chip in desktops and workstations aimed at corporations.

The Gateway and Pionex Elite announcements come at an important time for AMD, as it attempts to grow Athlon's consumer and corporate markets. Gateway's choice to go with AMD, however, isn't just about customer demand; opting for Athlon offers Gateway a second source for PC processors.

Gateway has publicly criticised its primary processor supplier, Intel, for not delivering enough supply of processors.

Tight supply of Intel Pentium III chips, specifically with Intel's 733MHz Pentium III chip, when they first began shipping, combined with two month delay in the introduction of Intel's 820 chip limited PC makers' ability to deliver high-end PCs in the fourth quarter of 1999. While those problems are now behind Gateway and other PC makers, the situation helped AMD gain another foothold, according to executives at the chip maker.

"I think it's been pretty public that we've gotten business as a direct result of people saying, 'We just can't get enough parts,' " said Gary Bixler, field marketing manager for channel sales and marketing at AMD. "In general, OEMs [original equipment makers] put a tremendous value on having a second source for this very reason... where there's an inflection (in supply)."

While AMD works toward gaining acceptance at the high-end of the market, it is also about to take its Athlon technology into the low-end of the market.

With its K6-2 and K6-III chips nearing end of life, AMD is developing a new chip for value PCs. Due in the second half of 2000, the chip will eventually take the place of the K6-III and the K6-2 line of processors now used in value PCs. The chip will be based on Athlon, but will have a different name.

Basically, that means that AMD will take a page from Intel's playbook and offer a lower-cost version of the Athlon processor, with lower clock speeds and less cache. The processor core, however, will be the same. The core will be Spitfire, which will offer a new socketed approach that reduces the amount of packaging needed for the chip. This will allow it to be mounted on a motherboard using a number of pins, instead of a special cartridge such as is used now.

"We have a very strong position with K6-2. We don't want to give up the ground we've gained in the low-end," Bixler said.

That means, in order to maintain its position in the value PC market, AMD will create a brand new Athlon-based follow-on to K6-2. While it will do so, it is important to note that K6-2 will live on at least through the end of this year, Bixler said.

The K6-2 will, in fact, go through at least one more revision. That revision involves moving it to a 0.18 micron manufacturing process and adding 128KB of integrated Level 2 cache, two performance improvements that should translate into better performance for the chip. This transition is expected to take place this quarter, with the resulting K6-2+ chips coming in at 533MHz and faster.

K6-III, however, is another story. While a K6-III+ chip has appeared on some AMD roadmaps, Athlon has largely displaced it. "I think the K6-III has served its purpose," he said. "We'll continue to support it where it makes sense."

And so it goes. With the new value chip, "You're going to see another line of infrastructure support for Athlon. A lot of the things you see in that market now right now, such as integrated graphics, you are going to see applied to taking Athlon to (the low-end) as well."

That means that AMD, along with third-party vendors, will attempt to develop low-cost PCs around the new Athlon-based chip and its EV6 bus. Those chip sets will offer features, such as integrated graphics engines, that help keep them priced at the low-end.

One such vendor to provide motherboards and chip sets for AMD's next value offering will be Silicon Integrated Systems, or SIS, a Taiwanese motherboard and chip set company, Bixler said.

The new PCs announced today by Pionex and Gateway, include a number of desktops and workstations aimed at corporate users. Pionex's Elite Professional Workstations will be available with 600MHz, 700MHz and 800MHz Athlons at prices ranging from $1,999 to $5,399. More information is available at Pionex Elite's Web site.

Gateway's new Athlon-based Select PC will start at $1,299. For that price a buyer can purchase the Gateway Select 600 model with a 600MHz Athlon chip, 64MB of RAM, a 10.5GB hard drive and a 17-inch monitor.

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