AMD to launch new laptop chip

AMD's chips have found their biggest success in server and desktop computers, and many analysts say its mobile offerings lag those of Intel.

Advanced Micro Devices Inc said on Thursday it will offer a new chip for laptop computers and said it expects to be able to supply one-third of the market for computer microprocessors by 2008, stepping up its challenge to rival Intel Corp's dominance.

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The announcement comes as investors and analysts are keen to see how No. 2 chipmaker AMD, which has grabbed market share from Intel over the past year, will respond to a new line-up of chips being rolled out by its far larger rival.

The laptop chip showcased by AMD executives at the company's technology day on Thursday is based on a new design that will help improve laptop battery life. The company expects to make the chip available in the middle of 2007.

AMD's chips have found their biggest success in server and desktop computers, and many analysts say its mobile offerings lag those of Intel.

Marty Seyer, vice president of AMD's commercial business, said the company has a target this year for 30 per cent of the market for server chips, where AMD has made its biggest strides on Intel. That's more than a one-third jump over the 22 percent server chip share it held in the first quarter.

But the glimpse of AMD's upcoming laptop chips left several analysts saying they were hungry for more details before they can evaluate how the products stack up against designs that its arch-rival may be preparing to offer.

"People were hoping that there would be a little more detail about those chips and when they will come out," said Cody Acree, an analyst with broker Stifel Nicholaus in Dallas, who attended the company briefing in Silicon Valley.

AMD officials declined to comment on when exactly they expected to begin shipping chips to the world's largest computer maker, Dell Inc, which recently agreed to begin using AMD chips instead of relying only on longtime supplier Intel.

But Seyer hinted that its initial contract to supply high-end server chips to Dell could lead to further ties. "I have yet to see a partnership we have in which that one entry point doesn't expand into multiple products," Seyer said.

According to Mercury Research, AMD had 21.1 per cent of PC processor shipments in the first quarter, a sharp gain from the 16.9 per cent share it had a year earlier.

On Thursday, AMD said it expects to increase that share to one third of the microprocessor market by 2008. Microprocessors act as the digital brains of computers and network equipment.

"We are fully positioned to service one third of the market by 2008," Daryl Ostrander, AMD's vice president of manufacturing, said at the meeting. "We will manage, as we always do, these capacity additions. We aren't going to build too much, we aren't going to build too little."

Earlier this week, AMD said it would spend an additional $2.5 billion over three years to upgrade and expand its two factories in Germany.

AMD officials said the company was on track to have production running in volume in the fourth quarter on 65 nanometer chips, the current cutting edge of the industry, at its latest fabrication plant in Dresden.

It expects the next generation of chip manufacturing technology -- capable of creating features as small 45 nanometers across -- will be ready 18 months later, or around the middle of 2008.

AMD shares closed up 50 cents, or 1.62 per cent, at $31.39 on Thursday on the New York Stock Exchange.