CEBIT: AMD unveils its first two 45nm processors

Playing catch-up with Intel, AMD says new server, desktop chips will ship later in '08

Advanced Micro Devices revealed the first two processors to come out of its new 45 nanometer manufacturing process at the CeBIT conference in Germany.

Both processors -- one on the server side and one for the desktop -- are scheduled to ship in the second half of this year. Garry Silcott, a spokesman for AMD, declined to specify whether the chips will launch in the third or fourth quarter of 2008.

Silcott also said AMD is manufacturing the 45nm chips now in its Fab 36 plant in Germany. The new chips, code-named Shanghai for the server version and Deneb for the desktop, have already shipped to a "select list" of customers, he noted.

News that AMD's 45nm efforts are under way but that delivery is still several months away comes as industry rival Intel continues to ship pieces of its growing family of 45nm Penryn processors. Even though AMD was giving Intel a market and mind share run for its money a few years back, financial troubles and delayed products have forced the company to play a long game of catch-up in recent months.

"It's late, but it's not too late for AMD to come out with 45nm chips," said Dan Olds, an analyst at Gabriel Consulting Group. "The degree to which these chips can compete with Intel depends on whether 'second half '08' means July or late December. If we're talking July, then this might allow them to pull back to parity with current Intel products. If we're talking December, or essentially the thirteenth month of '08 -- namely January -- then they're still firmly behind Intel."

Olds added that if AMD had told its customers that 45nm chips were coming back when the company was on top of its game, then a lot of customers may have waited to upgrade their systems. Today, that's probably not going to be the case, he said.

"One of AMD's problems is that they don't have nearly as much credibility as they had before," he said. "If Intel announced that they were going to have something big in the second half of this year, then there might be some customers who would delay purchases in order to buy boxes based on the new tech. AMD doesn't have the reputation right now, so their announcement probably won't freeze customer demand. Although, the news that they have processors out in customer land is an indication that the processors are working."

Charles King, an analyst at Pund-IT, has more faith that AMD's loyal customers will wait and see what the company comes out with. How long they'll be willing to wait is still the big question, though.

"If they start to get into the end of the year, that's trouble," said King. "AMD forged some very, very positive relationships with some good customers. But every extra month [they have to wait] is going to be seen as a nail in AMD's coffin because they've had so many problems in delivery."

AMD's Silcott said one thing that should give the company a boost over Intel is its adoption of immersion lithography technology, which involves including a layer of water between the lens and the wafer in the manufacturing process.

"It gives you greater resolution and lets you get to the smaller dimensions and line widths in 45nm," he added. "It's one of the largest differentiators between us and our competitors. We are the first to move to immersion lithography, which will also carry us to 32nm. We'll have that extra experience when we go to 32nm."

Silcott said AMD expects to hit 32nm by 2010 or 2011.

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