Intel (INTC) has come up with a chip architecture that is a sea change in the way that processors operate. Intel claims that it is the most significant evolution in the way that it produces its products since the company came out with its first chips over 30 years ago.
IBM (IBM) says that it is working on a similar technology for producing processors. Apparently so is Texas Instruments (TXN)
Intel rival AMD will have access to the IBM advances, so it is now a race to see which company can get the technology to market first.
Intel has indicated that its new chips will be available in the second half of 2007. The IBM/AMD products may not be available until early 2008, giving Intel a distinct advantage.
Intel has been looking for a "silver bullet" in a effort to get back market share taken by AMD over the last three years. The price battle between the two companies has destroyed margins at both. AMD’s stock has been driven down from $42.70 to under $17 over the last year.
If this is Intel’s coup de grace to AMD, the smaller company’s stock could go much lower.
Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
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