AMD On Track For Summer Launch Of Barcelona Quad-Core

AMD officials report the company is on track for the launch of Barcelona, its first native quad-core server processor.
Most important for AMD in Barcelona's release will be a chance to reverse Wall Street's view of the company following its dismal first quarter performance. The company swung to a loss and reported a 7% drop in revenues, clearly suffering from more intense competition with Intel. Contributing to AMD's troubles in the quarter were "significantly lower" shipments of microprocessors and a drop in average selling prices.

What isn't in Barcelona that could help reverse the slump is major changes in AMD's processing core, something in line with what Intel did in introducing its Core architecture. "There really hasn't been a lot of innovation in the processing core of late," McGregor said.

AMD is still working off its AMD64 architecture, which was built for servers. As a result, the company lags behind Intel in chips for mobile computers, the fastest growing segment of the computer industry, McGregor said. AMD's technology is better suited for servers and desktops.

Beyond technology, AMD also will have to straighten out its channel strategy. The company last year focused heavily on meeting the demands of its newest OEM partner, Dell, at the expense of white box makers and retailers that are major buyers of AMD chips, Reynolds said. "They let the channel slide, to get the business with Dell."

Despite the hurdles, AMD's Allen expects the industry to move to Barcelona at a pace similar to the switch from AMD single-core chips to duo core in 2005. Within two quarters of the latter's introduction, 50% of AMD's shipments were duo core, he said. "I expect the ramp from duo core to quad core to be similar."

At the same time, Barcelona will nibble away at the market for RISC processors, which continue to lose share to x86. Sun Microsystems and IBM, which also sell x86 servers, are among the leading makers of RISC chips. "We still think it's important for us to keep eating into (the RISC market)," Allen said. However, AMD is more focused on grabbing a bigger share of the far larger x86 market dominated by Intel.

Sales of x86 servers slowed in 2006, as companies waited for the introduction of quad-core servers, according to Gartner. The market for RISC-Itanium Unix servers, however, was weaker, with worldwide shipments and revenue falling 1.6% and 0.8%, respectively.

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