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AMD's Gateway Deal Sparks Speculation and Market Surge

Strategic Insights

— 1 min read

As reported in PC Week Online magazine on Friday, AMD may have secured its next big-name customer in Gateway Inc., the South Dakota-based personal computer maker. The partnership, which is expected to be announced in March, would see Gateway adopt AMD's K6 chips, made in Austin, for its new line of computers. This move would enable Gateway to undercut Intel Corp.'s prices, a significant advantage in the competitive low-cost PC market.

Key Takeaways:

  • AMD and Gateway have been in negotiations, with AMD persistently pursuing the partnership despite no agreement yet.
  • AMD's shares rose $1.93 3/4 on Monday to $24.87 1/2 in trading on the New York Stock Exchange.
  • AMD has built its market share to 15.5 percent of the microprocessor market, with Intel's market share dropping to 75.7 percent last year.
  • Compaq Computer Corp. and IBM Corp. have already adopted AMD's K6 chips, demonstrating its viability as an alternative to Intel.
  • Industry analysts, such as Mel Thompson from MicroDesign Resources, believe AMD has proved itself as a significant competitor in the market.
  • AMD's assault on the low-cost PC market has gained traction, with Gateway's adoption potentially marking a significant milestone.

Statistics:

  • AMD's market share: 15.5%
  • Intel's market share: 75.7%
  • Rise in AMD's shares: $1.93 3/4
  • AMD's new stock price: $24.87 1/2
  • Date of expected announcement: March

Sources:

  • PC Week Online magazine
  • International Data Corp.
  • MicroDesign Resources
  • AMD Inc.
  • Gateway Inc.
  • Compaq Computer Corp.
  • IBM Corp.
  • Intel Corp.

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