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Intel Places Its Chips on New Woodcrest Line

Posted on: Tuesday, 27 June 2006, 18:00 CDT

By Mike Rogoway, The Oregonian, Portland, Ore.

Jun. 27--Intel says it's back on top.

After suffering through months of taunting by upstart rival Advanced Micro Devices Inc., Intel launched a new line of computer chips Monday that it boasts are more powerful and energy efficient than what AMD sells.

The microprocessors unveiled Monday are for Intel's Xeon class of chips, used in high-end corporate computers called servers. Code-named "Woodcrest," the new chips are the first step in a major shake-up of Intel's product line and, indeed, the whole company as Intel seeks to restore its dominant place in the microprocessor business.

"We're back in a position we're used to being in, and that's undeniable leadership," Tom Kilroy, Intel vice president and general manager of its corporate computing group, told analysts and investors at Woodcrest's unveiling Monday.

It was the first of at least four times in the presentation that Kilroy repeated the word "undeniable" while asserting the superiority of Intel's chips, suggesting Intel's sensitivity to AMD.

For months, AMD has been needling Intel in newspaper ads, magazine spreads and even on a giant Times Square billboard. AMD asserts that companies were wasting money on slow, inefficient Intel chips that gobble electricity.

With the new Woodcrest chips, Intel can again stake a claim to the technological edge, said Nathan Brookwood of the industry research firm Insight64. Tests using industry benchmarks for speed and power consumption now appear to favor Intel, he said.

"Intel is back in the ballgame, and they have a very competitive product here," Brookwood said. "Certainly it's a big change from a year ago when they could hardly win any benchmarks from AMD."

Intel has suffered a series of setbacks in recent months, missing financial targets in each of the past two quarters and losing market share to AMD.

Shares of Intel rose 28 cents Monday to close at $18.28 on the Nasdaq Stock Market. But Intel stock is down 27 percent so far this year.

AMD has been especially successful at gaining traction in the server business, increasing its share of the market from 5 percent in 2002 to more than 15 percent now, according to technology researchers IDC. Last month, Dell Inc. said it would begin using AMD chips in some top-end servers, ending the computer maker's exclusive relationship with Intel.

Woodcrest is the first in a series of Intel chips to use its new "Core Microarchitecture," designed to maximize speed and conserve power by packing two microprocessors, or cores, on the same chip. New Core processors for desktop computers are expected in July, followed a month later by new laptop chips.

Intel is also in the final stages of a 90-day corporate review, which the company says is a prelude to a major reorganization. The Santa Clara, Calif.-based company, which employs 17,000 in Oregon, has given no specifics about its plan.

Wall Street analysts have speculated that Intel could be aiming to trim its 100,000-person global work force by as many as 16,000 jobs, though others think Intel's cuts will probably be substantially more modest.

Intel's new Core class of chips gives the company an edge as it seeks to improve its fortunes, Brookwood said, but not an insurmountable one. He expects AMD to match or exceed Intel's latest advances when its new Opteron class of microprocessor is unveiled next year.

"It's a little bit like watching a tennis game," Brookwood said. "I think we'll see these two players volley for extended periods."

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INTC, AMD,

Source: The Oregonian

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