AMD Springs Spider On Market

Advanced Micro Devices launched a package of microprocessors and graphics chips on Monday dubbed Spider, in a bid to grab a bigger swath of the high-end PC market.

Along with a microprocessor that serves as a PC's core calculating engine, Spider includes graphics technology for serving up the advanced graphics beloved by gamers and a chipset that ties those elements together and connects them to other resources such as the main memory.

Spider is a step towards AMD's goal of putting high-end graphics capabilities on a single slice of silicon with its processors, a project AMD has dubbed Fusion. The problem, observers say, is that AMD is still lagging Intel (nasdaq: INTC - news - people ) in microprocessors, while trying to recoup lost market share in the graphics market.

"I see a continued struggle for AMD through the next few years," said Roger Kay, president, Endpoint Technologies Associates. "They can survive, they can even thrive, but it won't be a situation where they'll have a technology edge on Intel for any appreciable period of time."

AMD needs hits, badly. The company's shares have sagged 40% so far this year as it worked to integrate graphics specialist ATI—which AMD purchased for $5.4 billion last October— while fending off tough competition from Intel in microprocessors. By contrast, shares of Intel and ATI rival Nvidia are up more than 20% over the same period.