Intel Plans New Offensive Against AMD

Intel set out at Tuesday's opening of the Intel Developer Forum to assure followers that it would not let itself fall behind its smaller competitor. AMD has gained the upper hand in desktop chips, and is beginning to put a significant dent in Intel's dominance in laptop processors, recent surveys indicate.

AMD's embrace of 64-bit has paid big dividends for the company. Intel was slow to adopt the technology, and many believe that has resulted in market share losses for the Santa Clara, Calif.-based chipmaker. The moves also hurt the company financially; it announced last Friday that it would miss its revenue target for the third straight quarter.

Intel is also facing pressures on the legal front. The company is being sued in the United States by AMD, and has been the subject of inquiries in several other countries, among them Japan and South Korea.

But Intel is determined to break through the recent spate of negative news and push back at its rival. Among the largest efforts by the company is its switch to a 65-nanometer process technology.

"The number one competitive asset is the sheer scale of our 65-nanometer, 300-millimeter manufacturing capacity," CEO Paul Otellini told reporters Tuesday. With this new process, Otellini said he expects to open up a performance gap over AMD.

AMD plans to transition to 65-nm as well, but not until the second half of this year. 65-nm Intel Core chips, which will succeed the Pentium 4 processor, are expected to start shipping in the third quarter, Intel CTO Justin Rattner said.

"The Intel Core microarchitecture is a milestone in enabling scalable performance and energy efficiency," he explained, saying dual-core processors would initially appear in 2006, followed by quad-core models in 2007. "People will see systems that can be faster, smaller and quieter with longer battery life and lower electric bills."

Although Otellini won't say he expects a bump in market share, its clear that's what the company is aiming for. The switch to new manufacturing processes has traditionally provided Intel with a boost.

Also, the company plans to work with manufacturers to produce more innovative computer designs, including ultra-portable PCs based on Intel chips that are expected to hit the market in several weeks. In addition, Intel is urging computer makers to use its new Viiv multimedia processors in desktop machines.

"We are at one of those dual transitions, a new micro architecture and new silicon technology, and we have the capacity to retake share and that's our statement of intent this year," Otellini said.