AMD chip aims to beat Intel's Celeron

Advanced Micro Devices' release of its low-end Duron processor should give the company a performance advantage in the budget PC market, but computers using the chip won't be readily available until next month.

Tim Wright Consumer Marketing Director Advanced Micro Devices   Discussing the Duron's specifications and target markets.

The processor, officially released today, will initially run at 600 MHz, 650 MHz and 700 MHz. A budget version of AMD's Athlon processor, the Duron will be found primarily in low-cost PCs, ranging in price from $899 to $1,199, according to Mark Bode, division marketing manager for AMD.

On June 26, Intel will release its own low-end processor, the Celeron, running at 633 MHz, 667 MHz and 700 MHz, according to sources.

Sunnyvale, Calif.-based AMD has been gathering momentum in the PC market since last August when it released Athlon. Strong reviews combined with shortages of Intel processors and improved manufacturing strategies have allowed the company to gain market share and customers from rival Intel.

A number of analysts expect the company to report an annual profit from operations this year--something AMD has not accomplished since 1995.

Duron's architectural features will give AMD an upper hand in the sub-$1,000 market over Intel's Celeron, Bode said. Duron features a 200-MHz system bus, which is the main data conduit between the processor and the rest of the computer. Celeron, in comparison, comes with a slower 66-MHz system bus.

Duron also comes with 192KB of cache integrated into the processor, larger than the 160KB cache incorporated into Celeron. Benchmarks touted by AMD show that Duron beats equivalent Celeron chips on certain business and consumer applications.

Analysts in general put AMD's new chip ahead of Intel's in the low-end market.

"Duron will handily trounce the Celeron," said Kevin Krewell, an analyst with MicroDesign Resources. "It is a combination of the system bus, the larger amount of cache, the floating-point unit, and the newer architecture...It is a pretty cool product."

Chip competition

Mercury Research principal analyst Dean McCarron agreed, saying the only barrier to AMD's success is one based on company perception.

"I imagine it is very competitive with Celeron," he said. "There is an increasing chance of businesses picking up. They've got competitive offerings. They've been picking up market share...There aren't any barriers except in the heads of corporate IT buyers."

PCs with Duron processors won't be available until next month, however. "Systems will be available in the July time frame," Bode said. Compaq Computer will be the first major PC maker in the United States to ship personal computers with the Duron chip, and Fujitsu-Siemens is preparing its own Duron-based PC for the European market.

Part of the lag between the announcement and the widespread availability of computers comes from a lack of motherboards and other components needed to incorporate the chip into PCs. Duron uses a "Socket A" package, which differs from the "Slot A" connector used by most Athlons released to date. The change in package requires that PCs using the chip adopt a new motherboard.

The chip had been scheduled for release June 12, sources close to the company had said. In volume, the 700-MHz Duron costs $192. The 650-MHz chip costs $154, and the 600-MHz processor costs $112.

In the second quarter, AMD will manufacture approximately 1.8 million processors, Bode said, and it will make 3.6 million and 7.2 million in the third and fourth quarters, respectively.