Chip giants spell out the future

Chip rivals Intel and AMD descended on New York yesterday to address their respective analyst and shareholder communities.

Intel announced plans to combine its architecture business with its microprocessor products group, as part of a $100m campaign to target web integrators, ebusinesses and ISP. The initiative involves 1000 dedicated Intel employees.

AMD unveiled Duron, the new name for the company's family of processors aimed at the low end business and home market. Duron is based on Athlon and features full speed, on chip L2 cache memory, a 200Mhz front side system bus and 3DNow technology. AMD plans to begin shipping Duron processors in June.

As part of Intel's reorganisation, the development of microprocessors, chipsets, motherboards, systems and related software at the platform level will be combined into platform focused business operations. These will be targeted at enterprise servers and workstations, as well as the desktop and mobile markets. The research laboratories of the two groups will also be integrated.

Although the two companies held meetings in the same city, analysts believe the companies have different strategies.

Intel, long the industry leader, has been hurt by chip shortages because of higher than expected demand and the low numbers are expected to continue until the middle of this year. AMD is enjoying unprecedented success and has seen its stock rise from about $17 last October to the low $80s today.

But Andy Bryant, chief financial officer at Intel, said increased production capacity in the second half of 2000 should alleviate the chip shortages.

Intel has also been hurt by its diversification strategy during the last 18 months. The chip giant has spent billions of dollars acquiring 17 companies. It has also formed a business division, increased its wireless efforts and watched its investment group grow to be worth $11bn.

Nathan Brookwood, principal at researcher Insight 64, said: "Intel today is far more complicated to run. Five years ago, it was developing one chip and proliferating it downward."

But analysts warned that AMD's success could lead to similar shortages problems that are plaguing Intel.