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New company for Alpha chips due

Next week at PC Expo, Samsung will provide details on a new subsidiary that will be charged with marketing Digital Equipment's Alpha architecture chips.

Next week at PC Expo, Samsung will provide details on a new subsidiary that will be charged with marketing Digital Equipment's Alpha architecture chips, as Compaq Computer assumes oversight of the chip design team.

In what appears to be related to a larger announcement detailing See special report: 
Birth of a giantthe Compaq-Digital merger, Samsung, along with Compaq executives, will announce next Tuesday the creation of Alpha Processor, a subsidiary for the marketing and sale of chips based on Digital's Alpha architecture.

Samsung obtained an architectural license from Digital last fall, which gave the Korean manufacturer access to future versions of Alpha as well as the ability to design its own Alpha-based chips. Compaq agreed to buy Digital in a deal struck in January of this year.

The endeavor will constitute Compaq's first hands-on experience in a chipmaking venture, as the world's largest PC manufacturer metamorphoses into a more multifaceted concern.

Samsung is one of the most ardent and largest supporters of the 64-bit Alpha platform outside of Digital and will become increasingly central to the platform's survival. The company both makes Alpha chips and uses them in its servers. A 700-MHz version of Alpha from Samsung is due later this year.

The Alpha chip has been one of the issues cited by the Federal Trade Commission in its antitrust case against Intel. The FTC has charged that Intel subverts innovation, such as new chip technologies, through use of its monopoly position in the market.

Under the new regime, Samsung will design and manufacture chips while the Alpha Processor subsidiary will sell them and try to recruit computer vendors, said sources close to Samsung. Daeje Chin, executive vice president at Samsung and the CEO of Alpha Processor, will announce the company at a PC Expo reception. John Rose, senior vice president of Compaq's enterprise business unit, will also attend.

Compaq, meanwhile, will absorb Digital's chip design team after its acquisition of Digital is approved by shareholders, said sources, which will mark a substantial advancement in Compaq's involvement in chip production. Compaq has said that it is committed to supporting Alpha in the future.

A number of analysts, however, have said that the company will make an objective judgment about its future commitment to the platform after the release of the 64-bit Merced chip from Intel in 2000. Both Compaq and Digital have agreed to support Merced.

Compaq earlier today announced that it would provide details regarding the Compaq-Digital merger on June 12, following approval of the deal by Digital shareholders on June 11. Eckhard Pfeiffer is expected to provide further details on the merger during his key note at PC Expo on June 16.