Pact with Motorola may give AMD edge on Intel, analyst says

Motorola's Semiconductor Products Sector and Advanced Micro Devices (AMD) have agreed to a technology cross-licensing deal that will give AMD access to Motorola's state of the art copper-based chip manufacturing technology.

Under terms of the seven-year agreement, Motorola in return will have access to AMD's high-density flash memory designs, which it will use to make embedded devices for a range of products including cellular telephones and other portable gadgets, the companies said at a press conference announcing the alliance.

Motorola's technology uses copper wires to link together transistors on a chip's surface instead of the aluminium interconnects that are prevalent today. Within less than two years, AMD said, the copper technology will allow it to make versions of its forthcoming K7 processor that run at more than one gigahertz.

If the company delivers on that promise, such a chip would become the fastest x86-compatible processor available in terms of raw clock speed, beating out rival Intel's plans for its Deschutes, Covington, Mendocino, Tanner and Katmai chips, said Jim Turley, an analyst with MicroDesign Resources, which publishes Microprocessor Report, in a written response to today's announcement.

AMD plans to build the high-speed chips using a 0.18 micron manufacturing technology at its Dresden plant in Germany, AMD said.

Motorola, meanwhile, will use AMD's flash technology to supplement its own, existing flash memory designs. Flash memory differs from standard memory in its ability to retain data after an appliance has been turned off.

AMD's flash technology is generally regarded as superior to Motorola's, especially for larger memory arrays, Turley at MicroDesign Resources said. Future Motorola processors with on-chip -- or embedded -- flash memory will use the AMD design, while low-end parts with less flash memory will probably continue to use Motorola's existing flash design for many years to come, Turley said.

The injection of AMD technology will help Motorola in its bid to design so-called system-level chips, or devices that incorporate on a single chip functions usually carried out by separate components. Motorola last week said it is stepping up its efforts to design such products.

AMD and Motorola will pool their resources to advance the development of copper and flash technologies, working side by side at Sunnyvale and at Motorola's Texas facility. They will deploy the fruits of their joint efforts separately to make their own products, with initial results expected to appear during 1999, the two companies said.