AMD Lowers K6 Shipment Forecast for 1998

Advanced Micro Devices Inc.'s much-publicized production woes have forced the processor vendor to lower by some 20 percent its forecast for this year's shipments of the flagship K6 processors.

The Sunnyvale, California-based chip vendor now expects to be able to ship only 12 million K6 processors this year, as compared to earlier forecasts of 15 million units, said Mark Lunsford, AMD's Tokyo-based director of marketing for the Asia-Pacific region and Japan. Lunsford revealed the lower production target at a forum here dedicated to discussing how a faster 100MHz system bus will boost the performance of forthcoming processors, including next-generation K6 iterations such as the K6-3D.

Although rival Intel Corp. continues to gain market share for its high-end Pentium II chips, AMD still expects around 40 percent of total worldwide PC shipments this year to feature so-called Socket 7 processors, Lunsford said.

The K6 and other Pentium-class processors from vendors such as Cyrix Corp. all fit into motherboards featuring the older Socket 7 architecture, while Intel's Pentium II chips can only be mounted on boards featuring the proprietary Slot 1 design. The long-awaited K6-3D will be manufactured using 0.25 micron process technology, as opposed to the 0.35 micron design rules of past K6 iterations. And there's the rub: AMD's planned move to the more advanced 0.25 micron production technology has met with serious delays, officials admitted.

By the end of the second quarter, however, AMD will have re-tooled its wafer fabrication plant and all future K6 parts will be manufactured on the 0.25 micron technology, Lunsford said. But judging from the vocal complaints heard here today, AMD may be facing an uphill battle in convincing Taiwanese motherboard and system vendors that its offerings are worth waiting for.

Officials at several Taiwanese motherboard makers at a question-and-answer session at the forum today voiced concerns about AMD's ability to provide them with enough processors. The fact that AMD to date has been unable to provide many board makers here even with prototypes of the forthcoming K6-3D chip was a commonly heard complaint.

"There is not much point in shipping product if there are no processors available on the market," noted Via Technologies Inc. President and CEO Chen Wen-Chi, who hosted today's forum.

Via last month became the first chip set vendor to announce a chip set, the Apollo MVP-3, that is designed to run on boards featuring a 100MHz system bus that promises to bring a major performance boost to PCs. But since processor vendors have yet to start shipping devices that can run on the 100MHz bus, Via has yet to start volume shipments of the new chip set, said Chen.

AMD's Lunsford, meanwhile, did his best to calm the vendors with promises that AMD is doing its utmost to solve its much publicized production woes. In reality, however, there is only one way to really win over the island's manufacturers, admitted Lunsford: "I have to show up with the parts."

Advanced Micro Devices, in Sunnyvale, can be reached at +1-408-732-2400 or at http://www.amd.com/.

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