There may have been a time when its small size was a disadvantage for Advanced Micro Devices. But small is nimble, small is quick. And the chip maker's new president is working to exploit AMD's size to speed innovation. AMD President and Chief Operating Officer Hector de J. Ruiz sat down with a small group of reporters Monday afternoon. What emerged was Ruiz's quiet determination to win the company's battle against Intel. When it comes to remaining competitive, "What we need to do is get much more innovative in what we do," Ruiz said. "Athlon is a good example." AMD -- which introduced Athlon last August at 600MHz -- has cranked the chip's speed up to 1GHz in steady 50MHz increments. Earlier this month, the company introduced an improved version of the chip, code-named Thunderbird. But Ruiz, appointed in January, is just getting warmed up. "I think we're entering a technology speed race. I think it's going to put stress on a lot of people." AMD, for example, has already begun producing Athlons with copper interconnects, which yield performance gains at higher clock speeds. Copper is replacing aluminum in Athlon processors produced at the company's Fab 30 manufacturing plant in Dresden, Germany. The next step, Ruiz said, is the implementation of low-capacitance dielectrics, followed by silicon-on-insulator and, finally, the integration of all three on a single chip. Silicon-on-insulator, or SOI, technology has been in development for some time at companies including AMD and IBM; it adds a layer of insulation underneath a transistor inside a processor. The insulator, usually a layer of oxide deposited during the manufacturing process, reduces the drag of the silicon substrate on transistor performance. As a result, SOI increases transistor performance by reducing this drag, known to chip designers as parasitic capacitance, by limiting the electrical current absorbed by the silicon substrate as current passes from transistor to transistor inside the chip. IBM, for example, claims the addition of SOI can increase a processor's performance by between 20 and 30 percent. Low-capacitance dielectrics also increase performance by reducing the electrical resistance inside a chip. Where does Intel stand on the same innovations? Generally speaking, the chip king has been more conservative in terms of manufacturing technology. Intel has employed some use of low-capacitance dielectrics in its 1GHz Pentium III chip. But it will wait until next year to move to copper interconnects. For its part, Intel says copper is not needed until chips reach the next generation manufacturing process technology, known as 0.13 micron. The current generation, is 0.18 micron. "I'm glad we're doing it now (using copper), because we're learning a lot," Ruiz said. Fab 30, which began shipping copper this month, is running at about 20 percent of its 5,000 wafer-per-week manufacturing goal, according to Ruiz. "So far, the performance of the factory has exceeded our expectations," he said. AMDs strategy, as described by Ruiz, is a three-legged stool, with each leg representing a market segment. PC processors may be the dominant leg right now, but AMD is also targeting servers and Internet appliances -- legs two and three -- for its chips. Ruiz said to expect AMD-based Internet appliances sometime in 2001 -- possibly some of them based on the Linux operating system. When it comes to servers, AMD expects to introduce its Mustang chip later this year. An enhanced version of the Athlon processor core, it will have up to 1MB of Level 2 cache and a new transistor design that reduces power consumption. The Mustang will be used to produce a new corporate-oriented line of processors for workstations and servers as well as higher-performing desktop PCs. Mustang is also expected to yield a new Athlon mobile chip, known by the code-name Corvette. "I think we're very close. We are in the commercial space (now) outside the United States," Ruiz said. "We feel confident that in the second half (of the year) we'll move into the commercial space." What is it like to compete head-to-head with Intel? "I feel like any piece of business we've won is hard fought," Ruiz said when asked if AMD has benefited from business left by Intel's inability to meet demand for some of its processors. When it comes to Intel, "What are they doing badly?" Ruiz asked. "If there is anything (Intel) might not have done as well as it could have, it was anticipate demand for its products," he said. Also, Intel "seems to not have a big push on high-frequency parts." Aside from demand, Intel may have more work to do when it comes to learning how to best manufacturing higher clock speed chips, Ruiz said. As part of its strategy to offer greater innovation, AMD on Monday also introduced two new notebook processors that incorporate, for the first time, its PowerNow power-management technology. The new notebook chips, running at 533MHz and 550MHz, boost its K6-2+ family. (Conspicuously absent from the announcement is the K6-III+ chip. AMD has basically retired K6-III and now K6-III+, company officials said.) The chips, using PowerNow, can run in one of three states.

• In "high-performance" mode, the chip runs at maximum clock speed and voltage. Clock speed and voltage are scaled back in the "battery-saver" mode to extend battery life.
• In "battery saver" mode, the chip consumes about three watts of power, AMD officials said, compared with high-performance mode, where it consumes about 15 watts, on average.
• Both modes are similar to Intel's "SpeedStep" technology, which lowers the clock speed and voltage of a mobile Pentium III chip while a notebook is running on battery power. However, PowerNow has a mode that SpeedStep does not -- the automatic mode. In this mode, a machine can automatically scale clock speed and voltage to offer the correct amount of computing power needed for a given application, but also help extend battery life. PowerNow, AMD says, should yield battery life improvements of up to 30 percent.

Guy Kewney hasn't had a phone call from anybody at Intel for over three months; and now that its big rival, AMD, has announced its "New Athlon" chip and its Duron chip, he rather thinks he can give up any hope of hearing from Intel for a very long time. Go to AnchorDesk UK for the news comment. What do you think? Tell the Mailroom. And read what others have said. Take me to Chips Central