AMD tries to find its server mojo again

Looks to recapture x86 market momentum

Ten months ago, Intel shipped its first quad-core Xeon server processors. Last week, chip nemesis AMD finally answered back.

AMD took the first step in an effort to recapture its momentum in the server market by launching a quad-core version of its Opteron chip. Company officials hope the new device, which was code-named Barcelona, will have the same kind of business impact that the original Opterons did after being released into a world dominated by Intel's 32-bit chips four years ago.

Opteron, the first x86 chip able to run both 32- and 64-bit applications, was an immediate hit with server vendors as well as businesses and high-performance computing users. Its arrival posed the biggest challenge yet to Intel's dominance of the Windows server market.

But Intel has responded to that challenge - sending AMD's share of the server chip market into retreat, according to research firm IDC. In the second quarter of 2006, AMD-based systems accounted for 15.3 per cent of x86 server shipments worldwide compared with 84.7 per cent for machines with Intel chips, IDC said. But in the same quarter this year, AMD's share slipped to 14 per cent as measured by IDC, compared with 86 per cent for Intel.

When Opteron made its debut, AMD "snuck up on Intel and hit them with a hammer," IDC analyst, Crawford Del Prete, said. But he added that in recent months, "AMD has been caught pretty much flat-footed" by Intel's quad-core Xeons.

One user that remains sold on Opteron is the Texas Advanced Computing Center, a research facility at the University of Texas in Austin. TACC is using more than 15,000 Barcelona chips to build what may well be the world's largest supercomputer, with an expected processing capacity in excess of 500 TFLOPS.

TACC's assistant director, Tommy Minyard, said that when the $US30 million system was finished early next year, it would include about 63,000 processor cores. The supercomputer, called Ranger, is based on Sun Microsystems' Sun Blade 6000 servers and will be used primarily for academic research.

Opteron was picked as the processor because of its floating-point and memory-sharing capabilities, Minyard said. When TACC proposed the new system about 18 months ago, it set a chip clock-speed expectation of 2 GHz - exactly the point at which the first version of Barcelona maxes out. But Minyard said he had been hoping that the quad-core chip would run a little faster when it was finally released. AMD officials said at the Barcelona launch announcement in San Francisco that a 2.5GHz version of the processor would be ready to ship in December.

And executives from Dell, IBM, HP and Sun appeared in person or via video to say they planned to add the quad-core Opteron chip to their respective server lines.

Shipments of systems based on Barcelona are scheduled to begin as early as next month.

AMD chairman and CEO, Hector Ruiz, said the initial Opteron release raised the bar for what an industry should expect from a processor company. He contended that the quad-core chip would have a similarly profound effect on computing, despite Intel's time-to-market advantage. Barcelona is built on a single die, unlike Intel's dual-die approach, and it connects the cores on a chip directly to a system's memory and lets them share it.

Insight 64 analyst, Nathan Brookwood, described AMD's chip design as elegant.

But AMD is running uphill - and Intel isn't standing still. The week before the Barcelona launch, Intel announced the Xeon 7300 line, which is designed for high-end servers running workloads such as databases and ERP applications. And on the same day that AMD made its announcement, Intel raised its overall third-quarter revenue forecast, citing stronger-than-expected demand for its products worldwide.

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Patrick Thibodeau

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