Speedier Intel Chips Take Aim at AMD

After months of watching rival Advanced Micro Devices Inc. slug away at its market share, Intel Corp. on Thursday punched back with a line of computer chips that make PCs run faster and cooler.

Intel executives called the new processors the company’s most important launch since its Pentium chips debuted 13 years ago. The Core 2 Duo line of chips also represents Intel’s best hope at winning what’s expected to be a bruising fight against AMD, which has cut prices and boosted performance to win customers.

“Our new Core microarchitecture delivers stunning leaps in performance,” Chief Executive Paul Otellini said at Intel headquarters here. “These are the best microprocessors we’ve ever designed, the best microprocessors we’ve ever built.”

Core 2 Duo processors have two processing engines per chip and are built on a new design that improves a number of key functions. Analysts said those improvements gave Intel a technical lead.

The real winners: PC buyers, who can expect to pay less for desktop and laptop machines as Intel and AMD fight it out this fall in advance of Microsoft Corp.’s releasing the new version of its Windows operating system.

“You get high-end performance, balanced with longer battery life, and they’re cheaper than anything they’ve introduced at this level before,” said Shane Rau, a semiconductor analyst with IDC, a technology market researcher. “It’s going to be the fastest-performing thing Intel’s got, but compared to the best they had a year ago, you’re getting more and more for less and less.”

The new Intel chips will be available in desktops and laptops next month, although one high-end version is already being sold in some gaming computers.

Sunnyvale, Calif.-based AMD’s current processors, the Athlon desktop and Turion laptop chips, run faster and cooler than equivalent Intel Pentium chips and are cheaper. But Intel is turning the tables with the Core 2 Duo processors, which the company says deliver up to 40% more performance while using as much as 40% less power.

“AMD was the performance processor,” said Martin Reynolds, a technology analyst with Gartner Inc. “Now, they’ve got work to do over the next six months to stay out of trouble.”

AMD said it was ready to meet any challenge from Intel.

“In the last three years we have continued to increase our design wins, and that’s really the business side of the equation,” spokesman John Taylor said. “We expect to continue taking market share from Intel, in some parts of the market more than others.”

Intel had long had more than 80% of the world computer processor market, but AMD has chipped away at that, gaining more than 21% of the market in March.

“AMD’s share gain over the last year was because they were at a price-for-performance niche below Intel,” Reynolds said. “This really raises the stakes for AMD. They really need something good in 2007 to compete with these new products.”

Intel shares, which have declined 30% this year, fell 3 cents to $17.47. Shares of AMD, which topped $40 in March, dropped 19 cents to $18.06.