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Advanced Micro delays chip release

December 07, 2007|From Bloomberg News

Computer processor manufacturer Advanced Micro Devices Inc. on Thursday said it had delayed the widespread release of its newest server chip because it was running too slowly.

Some Barcelona chips had a glitch that led them to stop working, and the technology that fixes it makes them run more slowly, spokesman John Taylor said. The chips will be widely available in the first quarter, he said.

Clients such as Taiwan-based Acer Inc. said last month that they expected to receive by December the semiconductors, which use four processors to increase computing speed.

The delay of the chip's debut, Advanced Micro's second, may benefit larger rival Intel Corp., which has sought more customers for server chips because they are more profitable than those for PCs.

Some Advanced Micro customers don't expect to get the chips until March, which will eat into the Sunnyvale, Calif.-based company's share of sales, BMO Capital Markets analyst Brian Piccioni said.

Advanced Micro's share of server chip sales tumbled to 13.9% in the third quarter, from 24.6% a year earlier, according to research firm IDC. Santa Clara, Calif.-based Intel has the rest of the market.

The company will keep shipping the Barcelona semiconductors to customers who aren't affected by the chip's slowness, Taylor said. Advanced Micro began distributing them to a limited number of customers in September. Chief Executive Hector de J. Ruiz had once expected the chips to come out early this year.

Advanced Micro shares rose 16 cents to $9.07. They have fallen 55% this year.

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