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Analysts review AMD's quad-core processor launch

Posted: 11 Sep 2007     Print Version  Bookmark and Share

Keywords:quad-core race  Barcelona processor  AMD chips 

When AMD officially launches its first quad-core processor this week, the chipmaker will be delivering what it needs to remain competitive against larger rival Intel. But to win badly needed new customers, AMD will have to show that Barcelona delivers superior performance for the price.

In terms of marketing, AMD has pulled out all the stops. But while AMD is likely to get its sales pitch out, it'll be in the labs where the chipmaker will win, or lose, customers. "At the end of the day, it comes down to performance," Gordon Haff, analyst for Illuminata, said. "We'll have to see how AMD and Intel stack up across a range of benchmarks."

In terms of clock speed, AMD will be behind its rival. Barcelona —the codename for the quad-core server chip that will be sold under the Opteron brand —will leave the gate at 2GHz. By the end of the year, it's expected to achieve 2.3GHz. Intel ships a dozen quad-core Xeon server chips with clock speeds reaching 3GHz.

AMD's sweet spot
But more chips and faster clock speeds alone won't put AMD out of the competition. That's because Barcelona won't be up against Intel in every computing category. AMD's sweet spot will be in four-way servers, and midrange two-way servers, Martin Reynolds, analyst for Gartner, said.

If a price war ensues, then it would probably be confined to those markets where the two rivals compete head-to-head, and Intel is likely to fire first, if it feels pressure from AMD. "Intel has a lot of flexibility," Reynolds said. "It'll adjust its pricing to match whatever AMD does with Barcelona. You can depend on it."

Nevertheless, both companies will prefer to maintain the highest profit margins they can for as long as possible. AMD is expected to sell Barcelona for a price that's about par with Intel. AMD is in a more vulnerable position than Intel financially. Over the last three quarters, AMD has lost nearly Rs.7,280.69 crore ($1.8 billion), primarily through competition with Intel.

During a meeting in July with analysts and reporters, AMD executives said the company is depending on attracting new customers and selling more to current customers to reach its goal of breaking even by the end of the year.

But while Barcelona is what's needed to keep AMD competitive, its sales are not expected to soar past the competition. "It keeps them in the game, but it won't give them a huge boost in profitability," Reynolds said. "But without Barcelona, (companies) would have to reconsider their AMD product strategies." Sales of Barcelona are expected to be strongest in the beginning among companies already using AMD dual-core processors in servers, Jim McGregor, analyst for In-Stat, said. That's because the company made sure that Barcelona could be plugged into the same socket, which means server manufacturers don't need to radically change the motherboard. "If you're already using AMD, then there's no reason not to go to quad core," he said.

Because the chip fits into the same platform as the dual-core model, companies can get a significant performance boost on many workloads at the same amount of power consumption, McGregor said. In addition, Barcelona, which has better virtualisation features, could also make it possible to consolidate servers.

While AMD is a year behind Intel in shipping a quad-core processor, the company remains in the game because companies switch server platforms over years, not months. "If they had been out with Barcelona six months ago, then they would have been in a better position in the market," McGregor said. "But (the delay) doesn't freeze them out."

Long term, however, the financially troubled AMD will need to build Barcelona, as well as the desktop version code named Phenom, into a platform that attracts new customers. "For Barcelona to be a success, it's going to have to win some new sockets, and not just existing ones," McGregor said.

10h architecture
During the release, AMD is expected to talk a lot about how AMD's new 10h architecture in Barcelona delivers a better price-to-performance ratio than Intel. Features contributing to the improvements in Barcelona include:

  • A move to 128bit floating-point execution units in 10h from 64bit FPUs. The wider design is expected to double the performance of floating-point vector operations;

  • A wider fetch window?32bytes from 16bytes. This is expected to allow the processor to handle a complete sequence of three large instructions per cycle;

  • Instruction-set improvements that include the addition of two advance bit-manipulation instructions, which operate on general-purpose registers;

  • And virtual machine optimisations in 10h to boost the performance of AMD's virtualisation technology, as well as compiler-related optimisations.

Despite the new features and analysts' opinions, the final word on AMD's success or failure lies with its customers. And their verdict will be heard loud and clear over the coming months.

- Antone Gonsalves
InformationWeek




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