Server makers move to get AMD quad-core chip in platforms

Its Barcelona processor was delayed for six months

Server makers have been moving to add Advanced Micro Device's quad-core chip to their product lines, despite what amounts to a six-month delay by AMD in getting the processor out the door.

Indeed, if AMD hadn't been hit with problems in the new chip, code-named Barcelona, it would seem as if nothing had changed for the company; server makers have been making product announcements based on the new chip despite the delay. AMD said this month that Barcelona is now ready to ship in volume -- an announcement that's been quickly met with commitments from vendors to release new platforms using the chip.

On Tuesday, Dell said it is adding five Opteron-based quad-core chips to its PowerEdge line, including blade servers. Hewlett-Packard had previously announced systems with this chip.

And, according to John Fruehe, manager of worldwide market development for AMD's server/workstation products, other vendor announcements are expected.

But the past six months have been rough on AMD since a bug in the L3 cache used by Barcelona turned up last year. As a result, AMD's value has taken a hit on Wall Street, the company has announced layoffs and most recently it lost Phil Hester, its senior vice president and CTO.

AMD will report its quarterly earnings after the close of markets on Thursday, although its stock price was up more than 5 per cent by late afternoon Wednesday to about US$6 -- less than half of what it was when it announced the quad-core last September. AMD's price may be getting help from Intel, which said its first-quarter revenue increased by more than 9 per cent to US$9.7 billion.

Regarding the overall economic climate in the US, Intel President and CEO Paul Otellini told analysts on a conference call this week that 75 per cent of Intel's revenues are not in the US. "So we don't see this really impacting our business at this time and haven't seen it so far in the last couple of quarters," according to a transcript on the conference call on Seeking Alpha.

"I think AMD had six very rough months," said Charles King, an analyst at Pund-IT. But "once a processor gets into a data center or business client, it takes a really massive screw-up for a customer to abandon a client," he said. The Barcelona delay has not been "horrendously difficult to deal with."

Among the Dell platforms with the AMD chip are PowerEdge SC1435 and 2970 rack servers and the M605 blade server -- all are two-socket systems. Dell claims servers can produce 79 per cent more performance compared to those based on dual-core processors.

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Patrick Thibodeau

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