AMD sketches out new high-end, low-end chips

Consumer electronics, new chips and name calling were all on tap at Friday's AMD analyst meeting.

SUNNYVALE, Calif.-- Advanced Micro Devices will take the high road and the low road in the chip market.

Executives here at the company's annual analyst meeting on Friday outlined a strategy that will, ideally, allow AMD to take market share in the server, corporate desktop and notebook space as well as penetrate the consumer device market with chips based around the same so-called x86 architecture.

"We're talking x86 chips down to a buck," said AMD CEO Hector Ruiz, who added that the chip markets AMD participates in should grow relatively well.

On the high end, AMD will release chips with two processing cores in 2005, and then follow in 2006 with chips based around a new chip core code-named Pacifica.

The company is relatively tight-lipped about Pacifica, but said it will be a dual-core chip that also contains virtualization technology--which allows a computer to run multiple operating systems--and a security technology called Presidio. Pacifica will appear in desktops, notebooks and servers in 2006. AMD said it also will come out with a new ultra low-power chip for notebooks.

At the other end of the spectrum, the company plans to pursue what it calls the "x86 Everywhere" strategy. It involves creating inexpensive, energy-efficient chips for Internet appliances, digital televisions, handhelds and cell phones.

The first product under the x86 Everywhere strategy is the Personal Internet Communicator (PIC), a $185 PC-like device being sold in India. Carriers in Mexico and the Caribbean will begin selling PICs in the fourth quarter.

"The beauty of x86 Everywhere is that you can leverage developments done anywhere into multiple platforms," said Fred Weber, chief technology officer of AMD.

Intel's plans are remarkably similar. The larger rival has already announced an advanced security technology called LaGrande, virtualization and dual core chips. Recently, Intel executives also said the company is working on x86 chips for consumer devices. Which company comes out with what first, however, is anyone's guess.

Next year as a whole looks promising, Ruiz said. Microprocessor unit shipments are expected to rise about 10 percent, and AMD should be able to grow faster than the market, he said.

"IT upgrades in the next two years are inevitable," Ruiz said.

Cell phone shipments are expected to rise to 700 million units in 2005, giving the company's flash memory business a boost.

AMD experienced something of a banner year in 2004, as the company saw both rising selling prices and several consecutive profitable quarters. In several previous years, it reported multimillion-dollar losses. It also began to penetrate the server market place, persuading several corporate customers such as Microsoft, DreamWorks and VeriSign to adopt Opteron-based servers in business operations.

One of the goals for 2005 is to get its chips into the corporate desktop space. Ruiz in part attributes the exclusion to the Intel Inside campaign, which provides computer makers

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