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Phenom And Penryn Quad-Cores Coming For Christmas

If you covet processing power like I do, then we're both looking forward to a great fourth quarter, when AMD unleashes its first desktop quad-core processors, called Phenom, and Intel -- already a player in that arena -- counterpunches with its first 45-nm Penryn parts.

The arrival of these devices will mark the opening phase of the desktop quad-core war I've been writing about for the past six months.

Intel and AMD already are duking it out in a bruising dual-core pricing battle. The two also are currently competing in the quad server arena, where Intel was selling some 20 quad Xeons well before AMD dove in with the launch of its native quad Barcelona in early September. Prices initially came down quite precipitously, but seem to have stabilized recently.

Where the bottom will be in the desktop quad market, however, is anybody's guess. Of course, a cost-cutting contest hasn't yet commenced in desktop quads, because right now only Intel is selling these things.

That will start to change once AMD begins shipping its Phenom family. AMD has never copped to a firm date, other than to say "before the end of the year." As more time has passed, there's been increased speculation that we'll only see a smattering of parts before year's end, so AMD can technically make its ship date, and output won't really rev up until early 2008.

I queried AMD on this today, on the heels of a report on VR-Zone, a Web site based in Singapore. VR-Zone reports that AMD has "confirmed" that there will be three Phenoms released before the end of the year, at 2.2 GHz, 2.4 GHz, and 2.6 GHz.

However, AMD has confirmed no such thing. Their spokeswoman gave me the standard boilerplate about how they don't comment on rumors and speculation.

Still, the VR-Zone report has the ring of truth. Of course, if you wanted to make up a story about upcoming Penryns, you could say there would be three upcoming models at 2.2 GHz, 2.4 GHz, and 2.6 GHz, and it would both make perfect sense and probably not be far from the truth. Not that anyone would ever do such a thing.

But back to the price war. Paradoxically, the most immediate effect of the release of Phenom won't be the cratering of desktop quad-core prices. Rather, it will increase the already intense downward pricing pressure in existing dual-core parts. Think of this as a technological waterfall effect. Once quads from both Intel and AMD are slotted in at the high end, dual core parts will lose their cachet faster than a Lincoln Navigator leaving the showroom.

We're already seeing dual-core prices -- $80 for a 2.2-GHz Athlon 64 X2 -- that are insane (as the infamous and, as it turned out, larcenous New York consumer-electronics retailer Crazy Eddie used to crow).

Desktop quad-core prices aren't insane yet (this chart is from August). Click image to enlarge.)

You wonder how the chipmakers can make money at these prices. The answer is, they can't. They have to sell enough of their top-of-the-line chips with high ASPs (average selling prices) to make money. My previous analogy with the automakers is apt; it's just like GM has to sell trucks to make a profit, while the Malibus just keep the factories running. Unfortunately for AMD, it's far less able to ride out periods of intense downward pricing pressure than is its larger rival, Intel.

In all the excitement about low, low multicore prices, I see I haven't written much about Penryn. I'll take a mulligan and send you over to my podcast on the 45-nm technology used in Penryn. Intel Senior Fellow Mark Bohr explains why this stuff is important.

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