The official lack of support from PC vendors at AMD?s announcement on the 3 April does not mean its attempt to shake Intel?s 90 per cent of the market is doomed to failure. That, at least, is the message from analysts and sources at tier one vendors, which still insist they have their own plans. But how much of the cake they will be able to eat by this time next year is still open to doubt.
Senior AMD officials are on record as saying they will capture a 30 per cent share of what they coyly term the ?sixth generation? market. That means they are targeting Intel?s Pentium Pro but it?s not a wide assault on the raft of products there already are. AMD is aiming to win desktop market share.
Joe D?Elia, senior microprocessor analyst at Dataquest UK, said that AMD?s problem is nothing to do with production. It has a state-of-the-art fabrication plant in Austin, Texas and has already broken ground in Dresden, Germany. The latter will come on stream in 1999.
D?Elia said: ?They could conceivably produce enough chips to challenge Intel but in market terms 30 per cent is not an achievable sum.? While there are several reasons for that, D?Elia said that if AMD succeeds in achieving any double figure it will be worthwhile.
?In the short term anything that gets them into double digits is aggressive,? he said. ?Ten to 15 per cent is achievable but they have to get it right.?
AMD has not, so far, announced support from any of the tier one vendors. ?They have to get support from companies like Compaq, HP and IBM otherwise they?ll be playing in the second and third tier markets,? he said.
The company?s commitment to the desktop market could also be a flaw in its strategy, said D?Elia. Intel has an architecture for the Pentium Pro which means that it can produce multiprocessor systems for its customers.
?If we look at [the PC] business, the bulk of the business is still in desktops but any PC vendor they deal with will be forced into Intel?s arms when it?s not the desktop,? he said. There is considerable business there on the workstation front as well as SMP servers.
A call round tier one vendors produced varied answers. A representative for Compaq, a favoured partner by AMD, said: ?There are no products currently available or planned at present using the AMD chip but Compaq is continually evaluating new products.? Like many other vendors, Compaq has talked to AMD. It produced a machine based on the Cyrix Media GX chip as part of its Presario range.
Keith Corbett, marketing communications manager at the Mitsubishi Electric PC Division, another first tier vendor, said: ?The AMD technology has a lot of merit. We, like most other PC manufacturers are looking at it and evaluating it.?
But there is more commitment from Apricot than meets the eye. Another source at the company said: ?I think it looks likely and the K6 sounds positive. Intel has its own agenda which is different from PC manufacturers.?
IBM was adamant it will not use AMD parts. A representative at the PC Co said: ?We won?t use them. If we don?t use Intel chips we have our own technology we can use instead.? He was referring to IBM Microelectronics which has a deal to manufacture chips for clone company Cyrix.
There is a number of European companies in the frame to use the K6 technology but AMD America is keeping the lid on details of these. Elonex, Evesham Micro and Opus are all close to releasing machines based on the processor when volumes become available.
Richard Baker, European marketing director at AMD, said his company was confident it will strike deals with first tier vendors.
?I would be very hopeful we?ll have first tier vendors in place by the end of the year,? he said. That will help clinch AMD?s stake in the chip market but he admitted the company was unlikely to achieve a 30 per cent share until Dresden starts producting processors in 1997.
It?s an all or nothing game for AMD. It has already invested many millions in developing the K6 chip, it has borrowed money to make sure the Dresden plant comes to fruition on time and the expertise of Nexgen has been integrated into the AMD superstructure. While the company still has a profitable future because of its other, non-microprocessor, product lines, its K6 is the most high profile offering it has.
The battle is sure to be bloody.
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