AMD Tries to Find Its Server Mojo Again

The chip maker launches a quad-core Opteron -- 10 months after Intel, which is winning back lost sales. By Patrick Thibodeau

Ten months ago, Intel Corp. shipped its first quad-core Xeon server proc­essors. Last week, chip nemesis Advanced Micro Devices Inc. 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 Intels 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 Intels dominance of the Windows server market.

But Intel has responded to that challenge sending AMDs 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% of x86 server shipments worldwide compared with 84.7% for machines with Intel chips, IDC said. But in the same quarter this year, AMDs share slipped to 14% as measured by IDC, compared with 86% for Intel.

When Opteron made its debut, AMD snuck up on Intel and hit them with a hammer, said IDC analyst Crawford Del Prete. But he added that in recent months, AMD has been caught pretty much flat-footed by Intels 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 worlds largest supercomputer, with an expected processing capacity in excess of 500 TFLOPS.

Tommy Minyard, TACCs assistant director, said that when the $30 million system is finished early next year, it will include about 63,000 processor cores. The supercomputer, called Ranger, is based on Sun Microsystems Inc.s 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 2.5-GHz version of the proc­essor will be ready to ship in December.

And executives from Dell Inc., IBM, Hewlett-Packard Co. and Sun appeared in person or via video to say they plan 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.

Hector Ruiz, AMDs chairman and CEO, 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 will have a similarly profound effect on computing, despite Intels time-to-market advantage.

Barcelona is built on a single die, unlike Intels dual-die approach, and it connects the cores on a chip directly to a systems memory and lets them share it. Nathan Brookwood, an analyst at Insight 64 in Saratoga, Calif., described AMDs chip design as elegant.

But AMD is running uphill and Intel isnt 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. n

Copyright © 2007 IDG Communications, Inc.

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