Intel-AMD chip battle as semiconductor stocks surge AMD looks for corporate Gateway
By Binti Harvey, CBSMarketWatch Jan 5 1999
New York--Intel's agressive pricing of its Celeron chip has AMD working to maintain control of the low-end retail market. Yet AMD has launched its own offence, quietly courting Gateway to infiltrate Intel's hold on the corporate segment.
Intel(INTC) has thrived on recent coverage of its all-out pricing attack on AMD's K6 chip, a lower-cost alternative to Intel's Pentium line. A latecomer to the low-end market, Intel is attempting to regain ground via agressive price competition with its low-cost offering, the Celeron chip.
Intel has slashed Celeron prices twice since August, and pushed up the release date of its 400MHz version to the first quarter, instead of the original release date in April.
Intel's strategy is to limit the average selling price of the K6, forcing AMD to depend on greater unit sales to increase profitanility.
AMD's K6, is featured in almost 70% of computers priced under $1,000, primerily in the retail market. Analists expect the demand for AMD chips to continue to increase in 1999, buoyed by the company's release of higher-speed chips in the first quarter, but pricing pressure from Intel may make it more difficult to grow profits.