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1/25/2006
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Intel Touts 45-Nanometer Capability While AMD Gains Share

AMD wins more than 21% of the x86 market in the fourth quarter as Intel touts its ability to advance chip design to new levels.

Intel keeps pushing the envelop on chip technology while rival Advanced Micro Devices keeps winning a larger share of the market.

Intel on Wednesday said it has successfully demonstrated a working chip that is manufactured using a next-generation 45-nanometer technology, which promises to use less power and generate less heat while delivering greater performance than current chips and help usher in the era of quad-core processing.

The Intel technology advancement comes as its increasingly pesky rival, AMD, has seen its x86 processor market share grow to ever-higher levels, exceeding 21% in the fourth quarter of 2005, according to Mercury Research.

Intel says it has manufactured a static 153-Mbit RAM chip using transistor line widths of 45 nanometers. The test chip has all the "transistors and interconnect features" that will also be used in the first microprocessors based on the technology that will hit the market next year, says Mark Bohr, Intel's senior fellow for process technology development.

The demonstration "should be an important factor in our customers' confidence in Intel's ability to provide improved products," Bohr said in a teleconference.

The use of 45-nanometer manufacturing technology provides the capability to design new processors that have twice the transistor density possible in the company's current 65-nanometer technology, as well as provide a 20% increase in transistor switching speed, he said.

The move to 45-nanometer technology next year is a continued validation of Moore's law, which states that transistor density doubles roughly every two years, Bohr says.

While efforts to boost the clock speeds of processors have ground to a virtual halt as chipmakers like Intel and AMD wrestle with the increased heat associated with faster chips, the greater transistor density gained by using smaller process geometries have allowed the companies to move to multicore processors that increase overall performance while maintaining existing heat envelopes. Both AMD and Intel introduced dual-core processors last year, and quad-core implementations are now on the road maps for both companies in 2007.

AMD remains about a year behind Intel in terms of bringing new processor manufacturing nodes to market. While Intel began shipping its first processors using a 65-nanometer manufacturing process late last year and expects to begin shipping more 65-nanometer devices than 90-nanometer devices in the third quarter of this year, AMD continues to manufacture its processors at 90 nanometers and does not expect its first 65-nanometer devices until late this year.

That technology lag hasn't kept AMD from getting more advanced and higher performing processors to the market in the past, and should not in the future, says Pat Patla, director of server and workstation marketing for AMD. "Two years ago people where saying that Intel being out front with 90-nanometer processors was going to prevent our Opteron processor from gaining momentum in the market, and that was absolutely not true," he says. "Why should things be any different at 65 nanometers, or even 45 nanometers?"

Indeed, AMD continues to enjoy increasing momentum in its long battle with Intel. According to Mercury Research, AMD's share of the overall x86 processor market grew to 21.4% in the fourth quarter of 2005, up from 17.7% in the third quarter. For the entire year, AMD's share is 18.2% of the market, compared with 15.8% in 2004.

AMD's high-water mark in the market-share battle was in 2001, when the company's share topped out at 20.2%. That share was built entirely on PC processors, however, and primarily on consumer-level accounts.

The current AMD market position is increasingly built on success in enterprise accounts, and with its Opteron processor for servers. AMD's share of the x86 processor market for servers grew to 16.4% in the fourth quarter, up from 12.7% in the third quarter.

Nathan Brookwood, an analyst with Insight 64, says the progress made by AMD in commercial accounts the past two years has changed the long-term game for the company and its position in relationship with Intel.

"There was a time when AMD need to be a whole lot better than Intel to persuade an IBM or HP to abandon their Intel-only strategies in enterprise-class equipment," Brookwood says. "But now that AMD has demonstrated that it can deliver the product, and both equipment makers and end-users are buying it, they don't have to continue to deliver quite as a dramatic advantage to be considered."

Intel with its manufacturing advances "certainly won't be in as weak of a competitive position by the end of 2006 as they were at the end of 2005," Brookwood says, "but whether that narrowed advantage will be enough to stop AMD's encroachment remains to be seen."

Intel was able to regain some bragging rights earlier this year when it introduced its dual-core mobile devices—the Core Duo processor and Centrino Duo platform—in advance of AMD's first dual-core mobile offerings, which are expected in the first half of this year. But it will be "at least a few more quarters before Intel can become more competitive in the server and desktop" markets, Brookwood says.

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