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AMD delays processors, scraps server chip

Advanced Micro Devices decides not to release a version of Athlon for multiprocessor servers and workstations as the company faces growing pains.

Advanced Micro Devices has dropped a chip for servers and delayed the release of some high-speed versions of its flagship Athlon processor as the company faces growing pains.

Executives at the Sunnyvale, Calif.-based chipmaker also confirmed AMD has decided not to release "Mustang," a version of Athlon for multiprocessor servers and workstations.

On the desktop front, AMD also has pushed back the release of a 1.5-GHz version of Athlon until mid-2001, rather than in the first quarter as was originally expected. By then, rival Intel will be preparing a 2-GHz version of the Pentium 4.

Additionally, mobile versions of its Athlon and Duron processors, code-named Palomino and Morgan, will come out in the first and second quarters, respectively, of 2001, according to company executives. Previously, the processors were expected in the fourth quarter of this year. Palomino will run at 1.2 GHz and above; Morgan will run at 800 MHz and above.

Company representatives characterized the delays of the mobile chips as strategic and marketing decisions rather than technology problems. Marketing manager Martin Booth also noted that the release of a new chip depends partly on having compatible motherboards and chipsets ready.

"It takes a little bit of time to get the infrastructure in place," he said. "With mobile engineering, it's a little bit harder than with desktops."

Mark Bode, a division marketing manager, said AMD also was still wrestling with heat concerns surrounding the mobile chips. Desktop Athlons normally consume 60 watts, while a notebook chip needs to come in at 20 watts or less.

"Power is possibly the single biggest challenge," Bode said.

Until it releases the 1.5-GHz version of Athlon for the desktop, AMD will spend much of the interim exploiting the territory between Intel's 1-GHz Pentium III and its upcoming Pentium 4, which will run at 1.4 GHz. There's plenty of room and a big market for value-conscious customers between the two speeds, Bode said.

"There is absolutely a gap in Intel's lineup," he said. "Athlon sits very comfortably in it.

"We have products that will play very well in the $1,000 to $2,000 PC segment."

The changes in AMD's product plans won't likely be viewed as major events. Instead, the setbacks come as part of the inevitable difficulty in trying to capture more market share and develop new products.

"It takes longer to develop (processors) than you anticipate," said Kevin Krewell, an analyst at MicroDesign Resources.

But despite these delays, the company is continuing to press hard in the desktop market. In 2002, AMD will release "Thoroughbred", a version of Palomino built on the more advanced 0.13-micron technology, and follow it will "Appaloosa," a similar version of Morgan.

AMD managed to leap into the performance segment of the PC market this year, at a time when demand for these PCs was fairly strong, and Intel was suffering chronic shortages.

At an analyst meeting approximately a year ago, AMD announced plans to get Athlon-based computers into the market in early 2001.

But because of slowing demand, CEO Jerry Sanders said during a company conference call in October that the company would delay its effort to get Athlon inside corporate PCs from a major manufacturer until the middle of 2001.

Mustang, which would have competed directly against Intel's Xeon family, was aimed squarely at the business market. Mustang would have been the same basic processor as the Athlon but contained a larger secondary cache, a memory reservoir inside the chip for fast access to data.

The delays to Morgan and Palomino were first outlined in AMD's third-quarter conference call in October and reiterated at an analyst meeting last week.

Despite the changes, AMD is working to circumvent any problems created by the changes. Palomino, for instance, will be marketed as a server and workstation chip. The company has also already released a chipset for multiprocessor designs.

"For one- and two-processor servers, they realized they didn't need Mustang," Krewell said.

Both Palomino and Morgan will also over time replace the current Athlon and Duron lines of chips. The two processors, like Mustang, are improved versions of the current Athlon and Duron chips. They will contain improvements to the processor core and consume less power.

Duron is a budget version of Athlon.

Palomino and Morgan were once code-named, respectively, Corvette and Camaro. According to published reports, the company changed the names from sports cars to horses. Because Mustang could be both, the name was not changed.