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AMD eyes TV set-tops, budget PCs

Advanced Micro Devices says it is gearing up for a specialized, cut-rate chip for TV set-top boxes and budget PCs that it will release if the market continues to grow.

TAIPEI, Taiwan--Although the company has been battered by plummeting processor prices, Advanced Micro Devices said it is gearing up for a specialized, cut-rate chip for TV set-top boxes and budget PCs that it will release if the market continues to grow.

The news confirms the consensus that intelligent set-top boxes and other inexpensive Net-savvy devices will likely play a substantial part in the future for PC and semiconductor manufacturers.

Last week, it was reported that Intel is preparing a budget processor, code-named Timna, that combines a processor, a memory controller, and a graphics unit. It will be aimed at PCs and TV set-top boxes and is scheduled for release in the third quarter of 2000. Intel is just one of many making this move. At the Computex show here, top-level executives at Acer said the PC maker is already conducting TV set-top box trials in North America and will announce products later this year.

"We cannot afford not to pay attention to the market," said Alan Au, director of sales, Greater China, for AMD. "The question is whether it is large enough to us to re-engineer our processors. Everyone is on the sidelines waiting to jump in."

While Au was cagey about the status and existence of any project, Thomas Tong, marketing manager for the computation products group for the Chinese market at AMD, seemed to indirectly confirm that work was proceeding.

"It depends on the market. If the market is growing, we can speed it up. We have the capability and the technology," he said.

The dilemma, of course, is profit. Sub-$500 PCs and TV set-top boxes mean traditional PC manufacturers have to redesign their products, which were originally conceived when a sub-$1,000 PC seemed low. For its part, AMD appears to be taking a different tack from Intel and National Semiconductor, both of which are cutting costs by integrating different chips into a single piece of silicon.

AMD is also contemplating integration but is also looking at removing some of the functionality from their basic PC processor core. TV set-top chips, after all, will not need to run spreadsheets, Au commented.

"We have the technology, but it is a question of what functionality. We don't want to overstrip it," he said.

Such a stripped-down AMD chip could easily fit into various markets. TV set-top boxes could become a hit in North America where families, rather than buy a second or third PC, buy a less-expensive Internet access device for the TV. "One for the kids that will be less powerful and for the Internet," he said.

Developing nations are also likely candidates. "China is pushing very hard on cable TV. It is very logical to piggyback with cable TV," Au said. "The set-top box is a very stripped-down PC that is cable modem dominated."

Budget PCs from major manufactures may also be an opportunity for such an AMD chip. Although currently dominated by emerging companies like Emachines, brand-name makers appear to angling a move into this territory.

"We get a lot of inquiries about it from various interested parties. We have the feeling that some big names are contemplating it," he said. "Once the big names come in, what will happen to Emachines?"