K6-2 chip puts AMD on top of retail shelf

Processors Record sales at low end dent supremacy of Intel boxes.

Chip clone manufacturer AMD made a surprise profit for its third. quarter, claiming it has taken market share in the sub-$1,000 PC market with its K6-2 CPU.

For the period ending 27 September, sales were $686 million, up 30 per cent on the previous quarter and 15 per cent on last year.

Although profit was only $1 million, analysts had been expecting another loss.

The company claimed that sales and bookings are running at record levels and that the inventory problems experienced by PC manufacturers earlier this year have finally been cleared from the channel.

The K6-2 is already topping retail sales in the sub-$1,000 US market, causing Intel sales to be badly dented by AMD machines.

But AMD's offering is said to be weaker in overall retail sales, in other PC markets and internationally. A number of companies, including Compaq, have shifted from being Intel-only vendors to adding AMD-based machines to their product lines.

But the factors that have taken the K6-2 to the top in one sector will apply to the others, as faster implementations come on stream and as the company progressively erodes corporate determination to stick with Intel.

AMD is now taking aim at the sub-$1,500 mainstream desktop market with the 350 MHz version of the chip.

Jerry Sanders, AMD chairman and chief executive, claimed the manufacturer was gaining share because it has 'superior technology' and highlighted the success of its 3DNow version of the K6-2 as an example of this.

Analysts have observed that one of AMD's real strengths is that the chip market is increasingly price-conscious and that the low-cost end of the market is booming.

But observers have claimed that Intel does not really have a coherent answer to rival manufacturers' chips that are both cheaper and as capable as Intel's products.