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AMD can do Pentium II, P6 chip

Chips compatible with Intel's technology would make it easier and cheaper for AMD to get into the mainstream PC market.

It may not be straight, but the legal path is clear for Advanced Micro Devices (AMD) to build microprocessors that use the "P6" system bus, a closely guarded Intel technology.

Should AMD decide to follow this course, selling chips with a P6-style data pathway would make it easier and cheaper for AMD to get into the mainstream PC market because the chips would be largely interchangeable with Pentium IIs, analysts say. In the next two years, Pentium II-compatible computers are expected to make up the lion's share of the PC market.

As it now stands, circuit board and computer makers cannot swap AMD's K6 chips with Pentium IIs. They must instead go to the expense of designing different computers to accommodate each.

The legal pathway could also open an opportunity for IBM, a company with access to a large chunk of Intel intellectual property, to enter the PC processor market.

AMD has acknowledged that the P6 technology is within its grasp but publicly denies that the company is planning to adopt it. But what AMD ultimately decides to do, given the opportunity to develop Pentium II clones, remains unanswered.

The P6 bus is a data path and a critical piece of Pentium II intellectual property. The term P6 is usually used to describe the architecture that forms the foundation of the Pentium Pro, Pentium II, and future Pentium II-compatible processors.

AMD's opportunity largely derives from licensing agreements and its increasingly close relationship with IBM, which has emerged as one of AMD's strongest partners. IBM has the rights to most of the intellectual property required to build processors and critical related silicon, called chipsets, which are compatible with the Pentium II.

IBM recently signed an agreement to manufacture chips for AMD and has been increasingly adopting the K6 for its low-end consumer computers.

The two companies are also in negotiations on a number of other fronts, according to sources close to IBM. Big Blue is "talking to AMD about all kinds of stuff," said a source close to IBM. The two companies have had ongoing discussions on financial topics, said Ashok Kumar, an analyst with Piper Jaffray.

"They can find some way to do it...IBM's agreement [with Intel] is as wide as it gets," said Richard Belgard, a semiconductor consultant. But Belgard added: "It's certain to land it court."

The key, Belgard said, is that a licensed foundry can make the chip or a licensed designer can design it. IBM has a licensed plant and in all likelihood has the necessary patents to design a chip, he noted.

Chuck Mulloy, an Intel spokesman, confirmed that IBM's cross-licensing agreement with Intel is broad, covering much of the intellectual property that underlay the Pentium II and P6 bus. It could even be possible for IBM to enter into the Intel-compatible chip market with its own unique design, Belgard speculated.

Of course, there is no guarantee AMD or IBM will move forward on plans to replicate Pentium II technology. Ben Anixter, vice president of corporate affairs at AMD, denied that the company will adopt a form of the P6 bus for its K6 or upcoming K7 chip. "It's possible, but forget about the legalities--we are not going to do it."

Despite AMD's denial, Piper Jaffray's Kumar believes it is imperative to adopt the P6 bus for the K7. With other bus technologies AMD chips will be saddled with higher support costs. With the P6 bus, AMD chips will be interchangeable with Pentium IIs, he said.

Other companies that have equally broad licenses with Intel are National Semiconductor and SGS Thomson.

National has the ability to make a P6 bus, said Steve Tobak, National's vice president of corporate marketing. At the March WinHEC Conference in Orlando, Florida, he noted that it would be "theoretically possible" for National to make Pentium II-style chips with the P6 bus for itself or third parties.

Cross-licensing doesn't provide all of the pieces of the puzzle, Intel maintains. Some of the technology surrounding the P6 is protected by trade secrets, Mulloy and others have said in the past. To get a functional equivalent of a P6 bus, vendors will have to execute some re-engineering.

AMD lacks the legal rights to make a chip with a P6 bus because in December 1995, AMD and Intel signed a lengthy legal settlement and cross-licensing agreement that specifically did not include rights the P6 bus, Mulloy said. But AMD contends it was not barred from adopting it.

"We can use a superset of the [P6] technology," Anixster said. "If we improved on the protocol somehow, we [could] use the superset." Put another way, AMD could develop a system bus that differed from the P6, but still used the bus at the core.

Lacking the necessary technology, AMD last year said it would build its upcoming K7 chip around the EV6 bus from Digital. Adopting the Digital bus would mean that future generations of AMD chips would inevitably be following their own path, according to the Microprocessor Report's Michael Slater and others.

In a conference call with analysts last week, AMD CEO Jerry Sanders reiterated that the K7 was on track to be released in 1999, but did not state that AMD was switching buses. If anything, Sanders seemed to indicate that a larger concern was making sure the K7 could fit in a variety of form factors.

"What we're seeing in the marketplace is that customers have some other ideas on how they might like to implement our K7 technology," Sanders said. "We will provide the K7 in a form factor that customer want for the markets they want to cover."

Intel is an investor in CNET: The Computer Network.