Advanced Micro Devices Chip to Be Used by Digital

Advanced Micro Devices Inc. said Thursday that Digital Equipment Corp. will use its K6 microprocessor--a rival to Intel Corp.’s Pentium--in an upcoming line of personal computers.

Executives of AMD, a longtime also-ran in the chip business, also told investors at its annual shareholder meeting that other big PC makers are evaluating the K6, with an eye to using it in new PCs.

Digital is the first top-10 PC maker to sign up as a customer for the K6. The win was critical for AMD, which needs the support of a handful of big PC makers to take on Intel.

“Digital is impressed with AMD’s K6 technology, and we do plan to use it in future products,” Digital spokesman Dan Kafferle said.

Sunnyvale, Calif.-based AMD’s stock jumped $4 to close at $41.50 on the New York Stock Exchange after the announcement. Intel shares lost 12.5 cents to close at $146.125 on Nasdaq.

AMD stunned the computer industry earlier this month when it introduced the K6. The chip mimics the way Intel’s Pentium chip works and performs the fundamental calculations of a standard PC. The K6, however, crunches numbers slightly faster than Intel’s top-of-the-line Pentium Pro and costs at least 25% less.

AMD is pinning its financial future on the K6. Chief Executive Jerry Sanders told investors Thursday the chip maker expects to announce more top-tier customers for the K6 in coming weeks.

So far, German PC maker Vobis Microcomputer AG and Japan’s Fujitsu-ICL have agreed to use the K6 in future machines.