AMD takes 'SledgeHammer' to Intel

As previously reported, the "SledgeHammer" chip, due in 2001, marks AMD's attempt to get into the lucrative market for server and workstation processors--a segment that the struggling chipmaker has long coveted. The AMD project had been known as the K8 to analysts.

The chip will be an extension of the current Intel-compatible chip design, or so-called x86 architecture, said Fred Weber, vice president of engineering at AMD's computation products group, at a processor industry conference here today. Intel's next-generation design, Itanium, will be a wholly new architecture.

"They did what they had to do," said Merrill Lynch analyst Joe Osha of AMD's decision to extend the existing x86 architecture instead of starting afresh. AMD simply doesn't have the financial resources to convince the industry to adopt a brand-new chip architecture, Osha said.

Even mighty Intel has spent several years and millions of dollars to convince companies to adopt its new IA-64 instruction set.

By extending the x86 to become what AMD calls "x86-64," AMD has "shifted the debate on to their own terms," namely, whose x86 chips are better, Osha said. That strategy could have some appeal with innately conservative business buyers who are wary of the risks of jumping to new designs.

Weber also said AMD chips would be growing in other ways. The company introduced a new system of hooking up several chips called Lightning Data Transport, or LDT, that will allow groups of as many as eight processors.

Today, AMD's microprocessors are made almost exclusively for desktop and notebook computers, especially those priced for cost-conscious consumers.

If successful, the new 64-bit processor could help the company's sagging bottom line. This is because SledgeHammer will go into higher-end machines, which cost more money. That may boost revenue for the chipmaker and could help it pull out of its financial tailspin.

Details on SledgeHammer and future Athlons will be one of a number of disclosures at today's kickoff of the Microprocessor Forum here, one of the major annual events for the silicon set.

Among other presentations, Compaq Computer is expected to provide details on the Alpha EV8, a server chip due in the next few years that will run at speeds of 1.6 GHz (1,600 MHz) and faster. IBM will discuss its upcoming Power4 chip, which fuses two separate processors onto one piece of silicon.

But, as is often the case with AMD, industry veterans are likely to contemplate the gap between company plans and reality.

The Athlon processor, which has trounced the Pentium III in multimedia benchmarks, emerged in August but has not had a significant impact on computer sales. IBM and Compaq have released Athlon computers in the last month--but retailers contacted in spot checks, including CompUSA, claim not to have them in stock.

Gateway has stated it is not making an Athlon system for now, and sources have said that the PC maker may also stop using AMD's K6 chip.

Part of the problem has been an inadequate supply of internal components that work with the chip, according to Ashok Kumar, an analyst at U.S. Bancorp Piper Jaffray. "It's been more aggravated by the situation in Taiwan," he said. "The motherboard supplies are being allocated to the Intel solution."

SledgeHammer, the EV8, the Power4, and other chips to be discussed at the forum won't come out for at least a few years. For the more immediate future, however, Intel will provide details on its upcoming "Coppermine" processor, a new version of the Pentium III that integrates 256 kilobytes of performance-enhancing secondary cache memory. The chip, due on October 25, is expected to debut at 700 MHz and 733 MHz, according to sources.

Michael Kanellos reported from San Jose and Brooke Crothers from Philadelphia. News.com's Stephen Shankland contributed to this report.