AMD Aims Long-Awaited 'Sledgehammer' at Intel

Reuters ^ | April 21, 2003 | Elinor Mills Abreu

[John Lenin]

AMD Aims Long-Awaited 'Sledgehammer' at Intel

Mon April 21, 2003 06:59 PM ET

By Elinor Mills Abreu

SAN FRANCISCO (Reuters) - Advanced Micro Devices Inc. AMD.N on Tuesday will unveil a new microprocessor designed for powerful and pricey corporate servers, part of a bid to crack a lucrative market dominated by its larger rival, Intel Corp. INTC.O .

Analysts said AMD's roll-out of its first Opteron processors was crucial to both the company's financial recovery and its effort to force the pace of innovation as both servers and desktop computers shift to faster data-processing speeds.

"For the first time, AMD will be participating in the most attractive segment Intel serves," said Dan Scovel of Needham & Co. "A lot of servers use two to eight processors per system, so this is a gravy train at Intel."

Sunnyvale, California-based AMD posted a $1.3 billion loss last year on revenue of $2.7 billion, one-tenth the annual revenue of Intel.

To compete, AMD has had to ratchet up the innovation with Opteron, which analysts say has a technological edge.

Unlike Intel's comparable Xeon server chips, AMD's new processor, code-named "Sledgehammer," will allow customers to run both the ubiquitous 32-bit applications and the newer, faster 64-bit applications.

Xeon runs only 32-bit applications. Crunching twice as many bits of data, with 64 bits, vastly improves the speed of applications, analysts say.

XEON RIVAL

Xeon dominates the server market, followed by Sparc chips from Sun Microsystems Inc. SUNW.O , according to market researcher International Data Corp.

Intel sells 64-bit Itanium processors aimed at more expensive servers -- $25,000 and higher -- but those are "abysmal" at running 32-bit applications, said Nathan Brookwood, an analyst at Insight 64.

AMD is scheduled to release a 64-bit Athlon processor for desktops, code-named "Clawhammer," in September. But Intel, which has about 80 percent of the PC processor market, does not have immediate plans for a competing offering.

With Opteron, AMD could increase its server market share by 2 percentage points a year, from 2 percent in 2002 to about 10 percent over four years, predicted Brookwood of Insight 64.

"That could be worth about $1 billion to AMD in revenues in 2006," he said. "That's assuming they don't get a key server supplier like Hewlett-Packard, IBM or Dell in their corner."

AMD may have one of those already. International Business Machines Corp. IBM.N is planning to offer Opteron-based machines to compete with Itanium-based Hewlett-Packard Co. HPQ.N servers, an industry source said.

Oracle Corp. ORCL.O , meanwhile, said it will be releasing versions of its database, application server and other software for Opteron-based servers.

But AMD has to overcome a reputation for stumbling. Its Athlon 64-bit desktop version has been delayed several times.

"If AMD can execute they could put heat on Intel," said Mark Melenovsky, server analyst at IDC.

PARTNERS KEY

AMD's goal is to be a "material player" in the server market, said Dirk Meyer, senior vice president of AMD's Computation Products Group.

"I wouldn't say this is a bet-the-company type of proposition because, at the end of the day, our success as a company is based first on how successful we are in generating volume and revenue in the highest-volume area, which is the PC side," Meyer said.

Even so, success with 64-bit technology is vital for AMD, according to analysts.

"If they don't make the 64-bit thing work on servers and desktops, then their future is somewhat in doubt in terms of the processor business," said Brookwood.

With Opteron, AMD is raising the microprocessor bar, putting pressure on Intel to boost the performance of products, analysts said.

"These chips are very fast and they will force Intel to be aggressive and to adopt higher clock frequencies in their chips," said Peter Glaskowsky, editor-in-chief of Microprocessor Report.

Opteron may even force Intel to follow AMD's architectural lead in adopting 64-bit extensions for its existing 32-bit x86 chips, analysts said. That scenario is made more likely given that Microsoft Corp. MSFT.O has said it does not want to have to write software for two different 64-bit architectures, they said.

"We think this may convince Intel that they need to port 64-bit to their x86 architecture," Glaskowsky said. "Intel would not like to do that, but they may not have a choice."

The new AMD chips will be priced between $283 for Opteron 240, roughly comparable to Xeon 2.6, and $794 for Opteron 244, comparable to Xeon 3.06, AMD said.

[John Lenin]

Nothing like a little competition to keep prices down.

[Libertarianize the GOP]

ping

[ShadowAce]

ping for the list, perhaps

[laotzu]

"Sunnyvale, California-based AMD...."

Is this right? I thought AMD was based out of Texas.

[John Lenin]

Nope, they are in CA.
I love my AMD, it's twice as fast and costs 30% less.

[laotzu]

I'm a recent convert. Only AMDs in my shop from now on.

Part of my conversion was due to their being Texas based. Oh well.

[wideawake]

They manufacture in Texas.

[Dead Corpse]

Cali, Austin, Dresden, and Malasia. Austin has a flash memory Fab and quite a bit of the processor validation labs.

[Dead Corpse]

Tom's Hardware Guide for some early benchmarks. Newisys is an Austin based server manufacturer. Good systems.

[Darksheare]

How many of us saw this coming back in 1994 or so when AMD's 486 SX40 outperformed Intel's 486 DX2 66?
I did.
*Evil grin*
Gotta love technology and competition.

[mikenola]

I was burned early on with AMD's compatibility with the x86 instruction set, but haven't had any problems with the latest generation of AMD's procs.

The real big question is who will spearhead the follow-on to x86. If AMD can get a leg up on that plus the 64-bit market (if any), they'll be golden.

Right now x86 CPUs are a commodity where price rules the day.

[Darksheare]

I got burned by Intel.
Actually had a 386 with a processor fault melt itself.
That's back in the days before cooling fans were needed, for those reading this besides us.
I got told it was my problem.
(Friend's computer, we sat there really well and truly amazed that a processor could smell like that.)

[John Lenin]

I have switched back and forth between AMD and Intel, I'm totally happy wih my AMD xp chip, for the money you can't beat them.

[Darksheare]

I'm waiting for the coming price wars.
(Back in the days of the 286 and the first run of the 386, AMD made Intel's chips for them. Have an Intel 286 chip laying around, says AMD in smaller print. No, it's not one of the 286 clones, but an honest to goodness Intel 286.. Gotta love it.)
It was Intel's second flight 386 that they made themselves that melted on my friend and I.
Wouldn't happen to be because they dropped AMD as their manufacturer, wouldn't it?
(Minor backroom sidenote to history for those reading along.)

[fooman]

I own AMD and Nivdia and just bought a custom 2700 drr HP computer with an atholon 2600 processor for 860 at circuit city.

GO AMD

[HamiltonJay]

I have been AMD fan now for years, far better bang for the buck than Intel. When the Clawhammer is out and at a price I like, I'll be running them for sure... until then, I'll enjoy the price reductions on the AthonXP's that are sure to follow.

[LtKerst]

AMD doesn't make anything thats "twice as fast"
Intel is far and away the Superior mfg. of CPUs

[Nagilum]

No way...Intel may have better fab facilities, but with regard to actual innovation and price vs. performance, AMD totally owns Intel.

[John Lenin]

AMD doesn't make anything thats "twice as fast"

Thats not what they are saying about the opteron chip. Intel will be playing catchup for a while.

[John Lenin]

We see a very high potential in the 64-bit market," Holger Byroff, general manager for the Americas at SuSE, told vnunet.com.

"More and more customers are touching the 32-bit limit of 4GB addressing for applications like data mining."

Byroff claimed that tests showed a performance improvement of about 150 per cent against other 32- and 64-bit environments, including Itanium 64-bit.

Performance is enhanced by an optimised 2.4.19 kernel, including Numa clustering technology which scales to 64 processors and 512GB of main memory.

It also provides enhanced asynchronous storage area network connection, and management of 600 physical hard disks.