The company says both IBM and Compaq, two of the world's leading PC manufacturers, have already committed themselves to using its new Athlon chip in some of their machines.

AMD said the top version of the Athlon will have a clock speed of 650-megahertz (MHz).

Real competition

"This is clearly a high-end chip," said Laurianne McLaughlin, senior associate editor, news, at PC World magazine. "It clearly poses real competition to Intel at the high end. It will be very attractive to power desktop users."

Many industry analysts will remain cautious, however, because of AMD's problematic new product launches in the past.

Unofficial reports of AMD's manufacturing appear to be favourable. "The rumours are pretty good, that they are having good luck in the fabs (fabrication plants) with them," said Keith Diefendorff, editor-in-chief of The Microprocessor Report.

Painful price war

AMD is having to fight hard for a share in a market that has become dominated by Intel, which just last week unveiled a 600-MHz version of its flagship chip, the Pentium III.

California-based AMD has been hurt by a price war with Intel. The smaller company's results in the first and second quarters of this year showed losses and it now plans a big marketing push around the Athlon in an attempt to turn around its results.

It will be helped by an independent assessment of the 600 MHz Athlon which is due to appear in the September issue of PC World.

It will report that this chip is, on average, 9% faster than the 600 MHz Pentium III from Intel. In graphics tests, the Athlon was 21% faster, running three-dimensional modelling software.

AMD named the new chip line the Athlon to break away from the association with the K6 family of slower, cheaper processors.