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AMD looks to DSL market

Struggling to become a major player in microprocessors, AMD is expanding into the burgeoning market for Digital Subscriber Line chips.

Advanced Micro Devices (AMD), struggling to become a major player in the market for desktop microprocessors, today said it is expanding into the burgeoning market for digital subscriber line (DSL) chipsets.

AMD will license technology developed by Alcatel (ALA) to produce DSL chipsets for both consumer modems and for equipment used at a telephone company's central office.

DSL technology is used to provide high-speed network access over standard copper telephone lines. The market for DSL chipsets is expected to grow rapidly as more Internet users and businesses clamor for multi-megabit access speeds.

According to research firm Forward Concepts, there will be at least 2 million DSL lines installed by 2001, with chipsets needed at both ends of the line. That estimate is expected to be revised significantly upward in light of recent efforts by companies such as Intel, Compaq, Microsoft, and others work to create a standard way for different DSL chipsets to communicate with each other (See related story).

"It's a natural move into this market. However, AMD has made forays into the communications market before only to pull back," says Will Strauss, president of Forward Concepts. "They were probably the first in the world with a [digital signal processor-based] modem, but they never really expanded on the technology and let Rockwell take the modem chipset market away," Strauss says.

AMD is aiming to provide chipsets for a high performance version of DSL that will offer data transfer rates up to 8 mbps by the second half of 1998.

Later, the company will offer a chipset for the consumer-ready version of DSL (referred to as "DSL Lite" or Universal DSL) that will offer access speeds up to 1.5 megabits per second (mbps), around 30 times faster than can be delivered through 56-kbps modem technology.

While AMD has experience in selling to telecommunications providers, the company will be facing an increasingly crowded field of competitors that include the likes of Texas Instruments and later Rockwell and Lucent. All three are among the largest suppliers of dial-up modem chipsets who are also eyeing opportunities in the DSL market.