Intel (INTC) is out with news that it is created even better chips. These will increase computing power and reduce the need for other chips to do ancillary work in PCs. According to The Wall Street Journal the new products include "circuitry that manages how a microprocessor retrieves data from external memory chips"
Perhaps the most interesting thing about the new products is that they employ a design pioneered by Intel rival AMD (AMD) as early as 2003. Intel says that the news chips will be its biggest leap forward in design since it introduced the Pentium in 1996.
AMD is struggling now. It has about 25% of the processor market for PCs and servers with Intel having the rest. But, gaining share has come at a horrible cost to its operating margins. Word on Wall Street is that AMD will need to raise more money to continue its fight against Intel.
AMD has brought suit against Intel, claiming that the bigger company had special deals with PC makers like Dell (DELL) to keep AMD out of that market.
AMD has done a lot for Intel. If the smaller company had not introduced superior chips, Intel might still be selling the Pentium III. AMD’s innovation has driven the need for improved products at Intel.
Intel also needs AMD so that it does not run into trouble as being a true monopoly with governments in the US and abroad treating it like they did Microsoft (MSFT), filing all kinds of antitrust actions.
The answer is that Intel should float AMD a loan to keep the smaller company in good health. It will aid the acceleration of innovation in the industry, and keep Intel from becoming a whipping boy for antitrust authorities.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks