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AMD's Merced competitor among chips detailed next week

Following its architectural triumph with the Athlon chip, Advanced Micro Devices next week will detail a 64-bit chip that will compete against Intel's Merced.

Following its architectural triumph with the Athlon chip, Advanced Micro Devices next week will detail a 64-bit chip that will compete against Intel's Merced.

The chip, referred to tentatively as the K8, along with the upcoming Athlon Ultra chips, will constitute AMD's attempt to get into the lucrative market for server and workstation processors, a segment that the struggling chipmaker has long coveted.

AMD microprocessors now almost exclusively go into desktop and notebook computers, and mostly into the cost-conscious consumer segment.

If successful, the Ultra and the new 64-bit processor could help the company's sagging bottom line. That is, because these chips will go into higher-end machines, they can demand a greater price. That stands to boost revenue for the chipmaker and could help it pull out of its financial tailspin.

According to First Call analysts, AMD's troubles aren't going away for a while. Analysts say the chipmaker is expected to have a third-quarter loss of as much as $1.24 a share. AMD's shares were off about a point in midday trading today, falling to 17.18.

Details on the 64-bit processor and future Athlons will be one of a number of disclosures at the Microprocessor Forum in San Jose, California, next week, one of the major annual events for the silicon set.

Among other presentations, Compaq Computer is expected to provide details on the Alpha EV8, a server chip due in the next few years that will run at 1.6 gigahertz and faster, sources said. IBM will discuss its upcoming Power4 chip, which fuses two separate processors onto one piece of silicon.

But, as is often the case with AMD, observers are likely to be contemplating the gap between company plans and reality. The Athlon processor, which has trounced the Pentium III in multimedia benchmarks, emerged in August but has not made a huge dent in computer sales. IBM and Compaq have released Athlon computers in the last month--but retailers contacted in spot checks, including CompUSA, claim not to have them in stock.

Gateway has stated it is not making an Athlon system for now, and sources have said that the PC maker may also stop using AMD's K6 chip.

Part of the problem has been an inadequate supply of internal components that work with the chip, according to Ashok Kumar, an analyst at U.S. Bancorp Piper Jaffray.

"It's been more aggravated by the situation in Taiwan," he said. "The motherboard supplies are being allocated to the Intel solution."

The 64-bit AMD chip, the EV8, the Power4, and other chips to be discussed at the forum won't come out for at least a few years. For the more immediate future, however, Intel will provide details on its upcoming "Coppermine" processor, a new version of the Pentium III that integrates 256KB of performance-enhancing secondary cache memory. The chip, due on October 25, is expected to debut at 700 MHz and 733 MHz, according to sources.

Additionally, Rise Technology will discuss the "Tiger," a low-cost PC processor that will be interchangeable with Intel's Celeron chip. Sony and Cradle Technologies will respectively provide details on chips focused on multimedia performance for appliances.

Although little is known about the new AMD chip, sources close to AMD have said that it will be a 64-bit processor, which means it can process 64 bits per clock cycle, double the current rate of current Intel and AMD microprocessors. Merced, due by mid-2000, will be Intel's first 64-bit processor. Fred Weber, vice president of engineering at AMD, is slated to speak at the conference on Tuesday.

Weber also likely will discuss the Athlon Ultra, a version of AMD's latest chip that can be used in multiprocessor servers and workstations. Ultras, coming next year, are expected to have buses that run faster than 200 MHz, the current Athlon standard, and contain up to 8MB of secondary cache, or four times the amount found on Xeon processors.

As for IBM, the Power4 will include two CPUs connected to a large cache, making for a total of 170 million transistors, said Tony Befi, vice president of technical development at IBM's RS/6000 division, in an earlier interview. The chip is expected to run at speeds faster than 1 GHz.

The Power 4 will merge two related Power architecture chip lines that have differences that let them work in two types of IBM servers--the RS/6000 and AS/400 lines. By merging those two lineages, the Power 4 will be able to go in both types of machines.

The design for the Power4 is scheduled to be complete by the end of 1999. This design milestone is known as "tape out"--when the chip blueprints are sent to a manufacturing plant that will build prototypes. IBM has built test versions of the CPU components of the Power4, each of which have 35 million transistors, Befi said. The chip should show up in servers in 2001, he said.

The Power4 also will use an IBM technology called "silicon on insulator," or SOI, which enables faster chips that consume less power. It won't be the first SOI chip, though, Befi said: Updates of the Power3 and RS64-III will use SOI and run at a clock speed exceeding 500 MHz.

News.com's Stephen Shankland contributed to this report.