After several false starts the race between Intel and AMD is finally on. And the race is on not in the lower and but at the higher end.
Advanced Micro Devices (AMD) unveiled a new family of Athlon processors. But the company disappointed many analysts as the chips represented only a small improvement in performance from the Athlon line's current top-of-the-line chips.
The Athlon XP 1800+, 1700+, 1600+ and 1500+ offer clock speeds of 1.53 to 1.33 GHz. By comparison, Intel's top P4 chip runs at 2 GHz. The Athlon XP 1800+ costs $ 252 in lots of 1,000. Intel's P4 chip running at 1.8 GHz costs $ 256 in lots of 1,000.
Analysts had been looking for AMD to close the clockspeed performance gap with Intel. AMD claims that because of a better architecture and higher bus speed, its 1.53 GHz chip outperforms the 1.8 GHz P4. Ironically, a year ago when AMD offered chips with higher clockspeeds, the company dismissed Intel's claims that its 750 MHz PIII chips were on par with AMD's 1 GHz processors.
Still, it is a very well-thought strategy on the part of AMD to get into the very lucrative market for servers and workstations. Now, this is a market which the company has long coveted because of the potential of fat margins which are possible in the high-end chips, something which AMD has not been able to achieve on its low-end chips.
Interestingly, despite the fact that both AMD and Intel are aiming for the same market with their respective 64 bit chips, their paths are totally divergent as far as the design of the chips is concerned.
However, unlike before, this time both AMD and Intel's future is totally dependent on this new family. Intel no longer is able to charge fat margins on its vanilla processors as competitors like AMD have been able to offer chips at a cheaper rate and that too which perform far better than anything Intel has to offer. So, Intel is now forced to announce price cuts on a monthly basis unlike earlier when it used to do on a quarterly basis. To offset the low margins here, it has to depend on the high-end chips.
Similarly for AMD, which has long been struggling, it is make or mar time as if it is not able to make money on the high-end chips, the company's very survival will be at stake. To ensure that it survives and at the same times becomes profitable, AMD has to work doubly hard to make its strategy a success. Otherwise the so called clash of the chips will remain just a pipe dream.