AMD, Intel Release Faster Chips, Cut Prices

AMD ships faster versions of Athlon; Intel readies a 2.8GHz Pentium 4.

The worlds two largest PC chip makers are revving up their product lines with new, faster chips and cutting prices on existing processors as their long-running rivalry heats up at the end of summer.

Advanced Micro Devices Inc. today made the first move, releasing two faster versions of its flagship PC processor, the Athlon XP 2600+ and 2400+. The chips, priced at $297 and $193, respectively, in 1,000-unit quantities, supplant the Athlon XP 2200+ as the top-performing processors for the Sunnyvale, Calif., company.

Intel Corp., based in Santa Clara, Calif., is expected to fire back by releasing a 2.8GHz Pentium 4 processor on Sunday, weeks ahead of its original schedule. The new chip will be priced at $637 in 1,000-unit quantities, according to sources close to the company.

Both chip makers are expected to follow the product introductions by chopping prices, with Intel wielding the biggest ax and slashing price tags up to 67 percent on its Pentium 4 line in two rounds of reductions, one on Sunday and another a week later.

In an unusual move, AMD today declined to release the clock speeds or frequencies at which its new processors operate. The decision highlights AMDs argument that clock-speed comparisons between the Athlon XP and Pentium 4 are misleading, with the chip maker contending its chip processes more data per clock cycle than Intels, resulting in higher performance thats not reflected in gigahertz-to-gigahertz comparisons.

Seeking to get that point across to customers, AMD names its chips based on what it contends would be a comparable Pentium 4. So the Athlon XP 2600+, which is thought to run at slightly more than 2GHz, is viewed by AMD as comparable to a 2.6GHz Pentium 4.

Since Intels fastest chip is clocked at 2.53GHz, AMD laid claim to the processor-speed crown.

"The introduction of the highest-performing PC processor in the world is a victory for application performance and a resounding defeat for the megahertz myth, " said Ed Ellett, vice president of marketing for AMDs Computation Products Group.

AMDs contention that clock speeds dont fully reflect a processors capabilities has gained some backing among industry analysts.

"Microprocessor cognoscenti have long understood the folly of using megahertz as a proxy for performance," said Nathan Brookwood, principal analyst at Insight 64, in Saratoga, Calif. "Processors used in todays high-end servers run at approximately 1GHz, but outperform the fastest desktop PC designs. Even within the PC processor segment, differing approaches to chip design make simple megahertz-based performance comparisons somewhat ambiguous."

But such arguments are a particularly tough sell in the consumer PC market, where buyers have traditionally relied on processor speeds to determine how fast one system is compared with another.

In reporting a quarterly loss of $190 million in June, AMD executives admitted Intels perceived speed advantage had left the company unable to compete head-to-head in the high end of the PC market, forcing the smaller chip maker to price it processors lower, eroding profits.