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Monday, September 18, 2006

Intel's New Tech Could Give It A Huge Edge

Stocks: (INTC)(AMD)

Intel has made a breakthough that will allow chips to communicate with one another using laser light, according to the Wall Street Journal. The move could improve connections between connections between components in computers grouped in data centers of in individual PCs.

AMD has been bragging that it will take its share of chips for servers and PCs from its current global share of about 20% to 40%. The company has given no specific reason for the thinking behind its boasts, but it has had customer wins with IBM and Dell. A new chip that runs much more efficiently and its marketed exclusively by Intel could change that.

Wall St. is already skeptical of AMD's market share claims. It stock has fallen from a 52-week high of $42.70 to its current price of $26.53. The market appears to see AMD as losing its race with its larger rival. Over the last six months, Intel's price has been flat. Shares at AMD has dropped 20%.

It may take a few years for the new Intel laser-powered chips to make it to market. But, the promise of tremendously improved performance and a better architecture for PC internal design should have the management at AMD worried.

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