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Industry giants Intel and AMD were today locked in a race to introduce a new generation of dual-core computer chips in a move that is set to lead to cheaper and more powerful PCs.
It would also prove a welcome boost for the eventual winner, as chip-makers struggle to maintain market share and earnings growth amid tumbling prices.
The extent of the impact of falling prices across the electronics sector was laid bare today as LG Philips - the world's second- biggest flatscreen-maker - said it expected to post its first loss since 2001 when it reports next week.
Prices of liquid crystal displays (LCDs), the most common type of flatscreens used in computers and TVs, slipped another five per cent in the first quarter after plunging more than 40 per cent in the second half of 2004.
LG Philips' bigger rival, Samsung Electronics, predicted last month a profit-sapping slide in LCD prices won't reverse until the fourth quarter, dashing hopes for an early recovery.
The new dual-core chip technology is being touted as the biggest change in PC technology in a decade.
Both Intel and AMD have something to prove and both expect in a matter of weeks or months to launch products which essentially combine two microchips into one.
For market leader Intel, the transition offers a chance to shake off a year's worth of missteps and delays with an on-time product introduction. For AMD, meanwhile, the change amounts to its best opportunity in years to take business away from Intel, its much larger arch-rival.
Having approached the limits of speed gains with traditional chips, Intel and AMD have moved to combine two chips on to a single piece of silicon.
The result is one chip with two cores that can operate independently - with one, for example, processing a video file while the other scans for viruses.
For some applications - like the multimedia processing that is seen as a key path for PC industry growth - dual core shows major gains.
Gartner analyst Martin Reynolds said: "On some benchmarks, it just blows everything away."
Earlier this week, Intel turned heads in the computer industry by allowing independent reviewers to publish performance tests on its first dual-core computer chip , called Extreme Edition, before it becomes officially available. The reviews were generally positive, although some noted the chip's high heat production.
AMD, which has set a "mid-year" target release for its dual-core chips, is dropping hints that the product may arrive sooner. It has told the media to expect important news at a New York event on April 21 to mark the second anniversary of its Opteron chip for business servers. However, Opteron has not rescued AMD's market share, despite a major push. AMD's share of the market for PC microprocessors dipped nearly a percentage point last year to 15.7 per cent, while Intel gained a point to 81.5 per cent, according to figures from IDC.
But it would take a persistent marketing effort and flawless manufacturing for either company to steal business from the other, said Apjit Walia, an analyst with RBC Capital Markets.
 News source: NewsFactor
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