'Fast is good, but cheap is better' appeared to be the attitude this year of PC buyers, who spurned the speediest microprocessors in favour of computers with cheaper chips. Market leader Intel released Pentium II chips with blistering speeds of 400 MHz and 450 MHz, but price-conscious consumers preferred PCs with cheaper 300 MHz chips, sparking a supply shortage for that speed grade. Sub-US$1,000 machines drove the Asian and the North American PC markets, boosting demand for cheaper chips such as Intel's older Pentium MMX line and those made by Advanced Micro Devices (AMD) and National Semiconductor subsidiary Cyrix. AMD - whose competition with Intel resembles that of David versus Goliath - captured an impressive 50 per cent of consumer PC sales in the United States. It reported record revenues of $685.9 million in its third quarter, its first profits in more than a year. Sales income was mitigated slightly by its fierce price war with Intel, which slashed chip prices throughout the year. AMD's sales were boosted by the wide adoption of its chips by top-tier PC vendors, a sharp contrast from mid-1997, when none of the world's top 10 computer companies used its product. Intel hit back by launching Celeron, a low-end family of PC chips, acknowledging the growing market for cheap PCs after months of steadfast belief that it needed to serve only the high-profit, high-end computer market. Its share of the US retail PC market fell 30 per cent to 54.3 per cent in August, compared with a year earlier, Computer Intelligence reported. Intel's first Celeron chip, which lacked performance-boosting cache memory, performed like a damp squib as industry publications ridiculed its slow performance and even its name, which was based on the word celerity, meaning swiftness. It was followed by a line of cache-containing Celerons, which was better received by the industry and the consumers. Celeron sales helped Intel boost third-quarter revenue to a record $6.7 billion, 9 per cent higher than the period last year. Cyrix - which sells its chips to the low-end computing market - saw a rise in orders, but production problems contributed to the quarterly losses of parent National Semiconductor. Cyrix chips are expected to continue to increase popularity, particularly for $399 PCs being launched in the US. Laptop microprocessors, a market served almost exclusively by Intel, was opened to formidable competition with the launch of mobile chips by AMD and Cyrix in January. Their lower-priced mobile chips helped push down laptop prices, with many vendors launching sub-$1,500 models in North America. Integrated Device Technologies last year unveiled a low-cost chip that could be used in either desktop PCs or laptops, but vendors have not adopted it for mobile devices. Rise Technologies in September announced it would spawn a sub-$800 laptop market supplying stripped-down mobile chips, but has yet to agree with a foundry partner to make its processors. Laptop prices are expected to fall next year, even without Rise chips, as Intel releases a Celeron family for notebooks that cost between $1,299 and $1,399. Other trends will emphasise speed, with a 500 MHz chip from AMD and a 600 MHz model from Intel due by mid-year.